You have scoured underground theatre and have a list of actors so sizzling hot you can hardly wait to launch their careers in the movies. At film festivals you have seen scores of shorts and debut features from which you have short-listed several directors you would like to work with. All of this has been at your own expense. Finally, after meeting dozens of writers and reading hundreds of screenplays, you finally have a script that you really believe in. You visit a printer and get some flashy business cards made up with your name as producer on them. But this is still no guarantee that you will get your movie made. You need money.
Development money is the sum total you need to invest in your idea until it is in a form (a package) suitable for presenting to investors and capable of attracting production financing. Development money is used to pay the writer while the screenplay is being rewritten, the producer’s travel expenses to film markets to arrange pre-sales financing from investors, and location scouting and camera tests. It also covers the cost of administration and overheads until the film is officially in pre-production.
Typical development budget
While there is no such thing as a typical budget, most development budgets will include the following items:
- Script payment fees agreed under the terms of a step deal or option deal
- Producer’s fee
- Travel and accommodation expenses for the writer and producer to attend development meetings with investors
- Location scouting and camera tests
- Creating a budget/schedule
- Script readings with cast
- Script editor
- Cost of duplicating scripts and postage
- Cost of developing concept for website
- Production of key art work
- Office overheads usually no more than 15% of the budget
- Producer’s legal costs
- Research expenses
How development finance deals are structured
Development money is the most expensive and financiers who put up development money typically expect a 50% bonus plus five percent of the producer fees. The bonus payment is usually scheduled to be paid on the first day of principal photography along with the five per cent of the producer’s profits as the film starts to recoup.
While development is the most essential money for a movie, it is also the most difficult to raise. Financiers, be they private or industry, consider this money to be the highest risk, and therefore the least attractive from an investment point of view. From a practical level, the more time (and therefore money) that can be put into a film before financing is sought, the better the chance of finance, be it development or production. And the further you can carry the project along without resorting to outside finance, the greater your profit share will be when the film finally comes into a revenue stream.
Sources of development finance
1 Film industry money
Many film production companies have their own in-house development departments, which work on script evaluation and rewrites. The money used to fund these ventures can come from a variety of sources, including private investment, share offerings, European government money and profit from previous projects.
Hint: Get a production company interested in your project. This will usually be triggered by a certain actor attached to your project, or because you have already secured a distribution deal in one or more countries allowing the production company to see a potential recoup.
2 Housekeeping deal
Sometimes a major distributor or production company will really believe in your ability to find the next hot project. They will offer you money to pay for your time, office expenses and writer’s fees. In return, they get a first-look or right of first refusal on anything you develop. If they pass on the deal, they will then expect to get the cost of developing that project, plus 50% profit from whoever you eventually sell the project to.
3 Distribution Companies
Distributors may read your script and agree to pay for a number of rewrites in order to turn it into a more marketable commodity for their market. When the film is finished, they will take back this money with an agreed profit.
4 Government finance (if you’re based in the UK)
The British Film Institute is known for believing in writers and creative producers. They finance a wide range of scripts and production slates. Details of their application requirements, and their compensation expectations are at their website.
BFI development funding is available for all stages of Development up to pre-production.
The fund will consider funding the following costs:
– Writer’s fees
– Research fees
– Reasonable overhead costs of the producer
– Payments to acquire and option rights to adapt works for the screen
– Producer’s fees
– Producer’s reasonable legal costs
– Script readings with cast
– Script editors
– Executive producer/mentor
– Other specific requirements, e.g. special effects/story-boarding
– A ‘package’ to present to potential partners
– Casting duly available.
– Training courses to aid project development
– Other legitimate development costs at the discretion of the fund.
In exchange for it’s investment the Film Council expects its
money back on the first day of principal photography, with a 50% premium.
5 Private investment
Occasionally you will find investors who love high risk, high potential investments, who are willing to finance you and/or your writer until the script is up and in production. These investors would be called angels in theatre, and if they finance a successful film, stand to earn many times their investment. Typically, they can command a producer or executive producer credit as well as the usual high interest repayments and a percentage of the producer’s net profits in the film.
Successful actors often fund development of projects with their eye on a potential starring role. Entertainers in other industries, such as music or sport, are also turning to development as a way to guarantee them the appropriate vehicle in which to launch a movie career.