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Finance tighter for
the film industry
From ARTHUR SANDLES, in London
The film industry
moves into the 1970s hoping that the worst of its agonies are over. It is probably being optimistic.
The movie game has re cently drawn up for itself a new set of rules and re cruited a number of new players — Morgan Gren fell, EMI, the new manage ment of MGM among
;Tt would be going against form to suggest that all of these will succeed. In a business were around 20
p^r cent of the product can really be callcd worth the
effort economically, fail
ure is somewhat easier to achieve than success.
rNot everyone agrees that th'ere has been a crisis in the industry. Mr Michael Winner,, a 32-year-old with a winsome habit of bring ing out profit-making pro ductions, is a flowing haired director about to uiiveil the 20th Century
F^x financed film 'The
'"In Winner's eyes, the scene has changed con siderably, but he points to production figures. In early December this year AWierican finance was in
v^ved in 72 feature films
inn production throughout the world. A year ago it
84, two years ago 50, tljfiee years ago 40. "So wftere is the crisis?"
It might perhaps lie in
the fact that fewer and fewer of these films are be ing made in the studios which hang like millstones
around so many company necks, and not many of them have much in the way of a budget.
For some time the film distributors in the US have juggled their cash in order to stay in business. "Now", as Winner points out, "they have come to the bottom of the barrel as far as financc is concerned".
The reaction has been one of considerable turn about. MGM has now spelt out its new filming policy under Mr James T. Aubrey. In the US, budgets will be kept below $2 mil lion and nearer $1 million if possible. In Britain and elsewhere in Europe MGM will probably not financc pictures costing more than 5420,000. Even by new tight-money standards this is a surprisingly low figure — considerably less than Mr Bryan Forbes and Mr Nat Cohen will be spend ing on films for Associated British.
Stars will in future take a part of the equity rather than a fee. The American show business magazine Variety recently quoted Aubrey in a discussion about a forthcoming pro duction, 'Dingas Magec'.
"Frank Sinatra, for example, is doing Dingas and you know what his
price has been, but he understands, as does other talent, and still others will, that going along on parti cipation makes sense for both of us.
"If it clicks he'll make a pile of money, and if it doesn't we're not stuck for those fancy salaries for stars, because the stars will now be more concerned about the value of their scripts; and for pre-pro duction costs on directors, writers and the whole bag. That day is now past".
Star fees arc probably the largest single item on film budget, and it will be interesting to sec how far this practice will spread.
There arc two difficul ties. Distributors in the past have tended to offer stars / directors / produc ers a slice of the profit, and the recipients have not been slow to point out
that this means what is left after the distributor has himself deducted what he considers to be his
What is likely to be demanded in the future much more is a share in the gross revenue. On top of thai, if a man is offered participation rather than salary he will want a greater say in management, and this could lead to bigger film business squabbles than
Intriguingly enough all this is going to lead to a considerable tightening in film industry financial arrangements. They have tended in the past to be very loose affairs.
Very often major pro jects are undertaken virtu ally by word of mouth agreement, and sometimes it is none too clear what has been agreed.
When the Fred Zinnc
mann v MGM fracas rcaches the courts, if it docs, it could reveal some fascinating facts about film trade relation ships. In this case, a $12 million movie was started and over S3 million spent before the row broke out.
The entry of people like Morgan Grcnfcll, the bank which is organising finance for Mr Dimitri de Grunwald's London Screenplays' extensive pro duction plans could, hopefully, end such situa
Morgan Grenfell has established a system whereby distributors in various countries guarantee to take a particular film for a minimum price. As production goes on, so the money flows in, maintain
ing a $20 million revolv ing fund.
Morgan Grenfell's man aging director Lord Catto said recently: "As a banker I do not deal with the content or artistic control. I am interested in the figures in the end column which show how much money is going to come back. Jf the money is not going to be forth coming then I will not al low the film to %o ahead'7.
Apparently in this deal there will be no absence of contracts and people should know where they
But, naturally enough, the whole scheme relics on the success of at least a high proportion of the pictures.
Catlo, in choosing de Grunwald, a man with a skilful financial director in the shape of Mr An thony Landi, has turned to someone with known man agerial skill in an indus try which has long re garded business as the faintly dirty vehicle on which art must. ride. In fact, such money as is available is flowing to those film men whose form shows a degree of finan cial responsibility.
A popular film-maker to day is not one who has made pictures that are a critical success necessarily but one who can regularly
do what he has promised for less money than he was given.
Producer - writer Mr Larry Kramer, who was responsible for 'Women in Love' was recently re ported at length in To day's Cinema. "We were budgeted at £709,016", he said. "United Artists (the American financing distri butors) estimated that this money would last for only 131 weeks. We shot for 16 weeks and our final cost was £650,680, a total of £58,336 under budget. I'm very proud of this".
United Artists is easily the most popular source of film finance. As Winner (whose own 'Games' film for 20th Century was bud geted at $5.25 million and came in at $4.74 million) points out: "They interfere less and they do not try to forcc you. into studios."
Since UA does not own studios this is hardly sur prising.
Sources of finance which do have large acre ages tend to add a studio charge on to production costs even if the studio is not used. Kramer went
to United Artists partly, he says, bccausc UA charged him overheads of $4,168. Columbia's pricc would have been $60;000, and MGM's $400,000.
This question of studios is now a very serious one. There is a global over
A film being made.
capacity, and film tech niques and equipment have so improved over the years that pictures can be made in any conditions. Studios will, as a result, be sold oil". Only those with sup
crfo facilities can possibly survive.
This is why Rank, put ting money inlo cincmas rather than film produc tion these days, is never theless keen to keep Pine
wood in its present superb
There is still money to be made in renting studio space to other film-makers, once the situation of over supply is resolved.