Berlinale 2022 - EFM
Industry Report: Produce - Co-Produce...
The Berlinale Co-Production Market discusses the challenges of combining private investment with co-productions
BERLINALE 2022: The panel attempted to profile private investors, how and when to approach them and the dos and don'ts for producers to work with them
On Sunday 13 February, the Berlinale Co-Production Market hosted a panel titled “Balancing Act: Combining Private Investment with Co-Productions,” introduced by Martina Bleis and moderated by producer Myriam Sassine (Costa Brava, Lebanon [+see also:
film profile]), of Lebanon’s Abbout Productions.
Sassine introduced the three panellists, namely Maximilien Leo, of Germany’s Augenschein Filmproduktion, Sundance Institute’s Industry and Catalyst Fund representative Caroline von Kuhn, and Thai producer and executive director of SEAFIC Raymond Phathanavirangoon.
On the topic of private money and what it means depending on where the production team is based, Leo highlighted that producers should focus on the actual deal (“what we get and what we give”): “Any financing source always comes with strings. It’s not evil, it’s just part of the deal. People giving money want something in return. For example, a regional film fund expects a certain regional spend, or a national tax shelter demands a certain financial impact on the local economy. We should ask the same question about private equities: What do they need?” He also said that the timelines of these backers are closer to those of venture capitalists and thus not aligned with the film markets, and spoke about how the mindset of arthouse producers differs from that of those people: “Of course, we want all the money possible, but what’s at stake? [...] As producers of arthouse films we focus on bringing the film to life, to secure its budget. But when you face people talking about its distribution and turnover, we need to learn to engage in totally different conversations.”
Von Kuhn agreed with Leo’s takeaway on arthouse producers’ mindset but she added that, from an industrial perspective, the local acquisition market has significantly narrowed because of many distributors financing films themselves – and this constitutes a big challenge for US investors.
In his contribution, Phathanavirangoon said he has always been curious to expand his production horizons and international talents. He regularly encourages directors to open their outfits and hire him as a producer. This flexibility has allowed him to work on many overseas projects such as Apprentice [+see also:
film profile], staged by Peanut Pictures, and has given him “much fewer headaches.” He explained that in Asia, producers normally don’t avail of state funding, so they are forced to seek private equities. The first problem is related to the subject matter of a film, since a number of local investors demand very local content with little international appeal. When it comes to co-producing, especially with Europe, another issue is not just getting the funds, but guaranteeing a good cash flow. He also called for “a little bit of understanding from the public sector,” as some players do not realise that producers need to get private funding to complete their films. Specifically, he mentioned the problematic case of a public backer forbidding the production to feature the logo of a private investor after all the agreements had already been sealed.
Answering a question about “where to find private money,” Von Kuhn said that the Catalyst Fund’s programme has been running successfully for ten years and in 2020, many funders approached the team to join the initiative. Each company or foundation was assessed, and all the backers had to align with the fund’s mission from practical and cultural standpoints. Leo answered that the main question should actually focus on what producers can offer potential investors: “Before you go out there and pitch the project to the wrong people, you need to understand the unique selling proposition of your package so that you can find friends and allies, and then money from sources other than local film funds might come in,” he further clarified.
Sassine also shared a personal anecdote to warn how not listening to funders that are not very familiar with how the industry works can be harmful. She spoke about the case of a backer who was very frustrated because their feature had not been submitted to Cannes, but was premiered at Venice and, despite its good success, he felt his voice unheard.
Towards the end of the event, Leo recommended to generally approach private investors at a later stage and to secure public funds at first, which give producers more credibility, and perhaps ask for the last 10-20%: “You will have a much harder time at the start, but if you package it so well for that special private backer, he can become a seed investor. So, there’s still no right or wrong.” He also suggested to never approach investors with one's own estimates but only with figures signed by renowned world sales agents, possibly one of the top players. Phathanavirangoon tuned in saying that, however, these estimates are generally “quite optimistic” and he prefers “to act as a translator,” trying to set realistic expectations and mentioning, for example, whether a title might not work in certain territories and why: “It’s part of an education process, I want to let them understand what they’re getting into.” Finally, Von Kunh suggested producers conduct diligence checks on potential backers and thoroughly examine their track record.
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