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The glory of artistic expression is in the translation of a vision onto a permanent medium. Musicians compose scores and movements and permanentize them with a recording. Painters measuredly spread pigments and oils onto a surface. Filmmakers unfortunately face a roadblock few other arts face. A masterpiece of film takes a magnificent amount of time, personnel and worst of all, money.
That is not to say that some other arts don’t require substantial sums to finance, or that great film cannot be done very inexpensively. This is just a generality that is pretty well accepted as normal.
So where do films get money?
The big blockbusters get money from one of the five big studios. These big five studios have always been the big five studios since they were formed. Their positions relative to one another have moved up and down, but for over a century, they’ve been on top. They don’t particularly like smaller films like ours*. It’s a simple cost/benefit analysis. Although it is relatively inexpensive by comparison, our small picture will almost certainly not generate the the revenue of a Batman film or a Pirates of the Caribbean epic. So for that we can’t blame them.
Other films go to smaller studios for financing. They still have the backing of a studio that can likely take a total loss of one small feature, but aren’t marred by the expectations of breaking box office records. Maybe the studio isn’t even looking to distribute to theaters.
Even still, other films are self financed or financed by a group of people. This is how our film, ALEXANDER MASTERSON will be made.
The Limited Partnership Agreement.
Our film will rely on a small group of investors (likely around 30, but perhaps fewer), who purchase production units. This team of investors represents the limited partners of our limited partnership agreement, with the producer representing the general partner.
Whatever profits the film generates is split equally between the general and limited partners (in the case of our partnership, the payments are split 80/20 in favor of the limited partner until 110% of the investment is recovered in order to accelerate the limited partner’s gains and make the prospect more favorable).
In this way the cost is covered in smaller bites, and can help partially finance a film to at least get the ball rolling. This model still requires the supervision of a lawyer, especially if dealing with interstate financing, as the laws on this type of partnership can vary state to state (you don’t want the SEC to have to get involved).
Before you can get a single investor, there must be at least a pretty good idea of what the budget of the film looks like. We will discuss this next time…
As always, if you have any questions about the our limited partnership, or just the filmmaking process in general, feel free to ask us by clicking the information icon above**.
*in recent years, the big studios have started smaller arms (Sony Pictures Classics, Fox Searchlight, etc.) to ferret out smaller, “artsier” films, but their bread and butter is still the huge marquee films.
**None of the above information should be construed as legal or financial advice. It is also not a solicitation for investment. Any inquiries about investment in our film will NOT be considered. This is just our experience on our film. It is meant for entertainment purposes only.