Independent film searches for a way as vaccines roll out and production restarts – deadline

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With over 50% of America’s adult population at least half-vaccinated and with studios setting start dates, visions of a return to normal abound. So what’s the prognosis for independent cinema, as insurers and bank lenders sit on the sidelines even as production improves?

Mark Gill, CEO of Solstice Studios, said things were looking up and he hopes to stick with a September filming date for Hypnotic, Robert Rodriquez’s thriller starring Ben Affleck. But right now, “You’re struggling to fund any size movie, except the smallest.”

“Most of the time what we do is [in the range of] 40 to 80 million dollars, which made it impossible for us to go into production. I had hoped it would subside. “

Robert Rodriguez, Ben Affleck
Mega

“As soon as the insurance is functional, everything falls back into place,” added Gill, referring to Covid-19 insurance, which disappeared for new independent productions more than a year ago. Specialty insurance is available but still too expensive at around 10% of the budget, or $ 7 million for a $ 70 million film.

“If you could guarantee vaccination for everyone on your team and your team, it would make a difference. If it is a new production, according to our Labor Council and the United States EEOC, you can make it a condition of employment. If someone decides they don’t want to take the job, that’s okay, ”said Gill.

The CDC reported on Sunday that about 140 million people, or 53.6% of adults, have received at least one dose of a Covid-19 vaccine. The pace is slowing down, however, with around 2.75 million doses per day on average, down 19% from the peak of 3.38 million on April 13.

Linda McDonough, head of film at AGC Studios, said that with the exception of places where Covid is under control, such as Australia where AGC does The most wanted in the universe, “It feels like for the next six months things won’t change until the data emerges from a post-vaccine world.”

AGC’s production budgets range from $ 5 million to $ 75 million. “For the lower end of that scale, we can write a check. For films north of $ 15 million, we will normally need additional bank funding, ”she said. She noted that the AGC made Locked up, demonic and Bowling during Covid, but sees larger projects remain on hold until 2022, when insurance is available and affordable.

Producers in other countries can access limited Covid-19 coverage from government programs, but in the United States they cannot, even though the sets have an excellent safety record and there are many showbiz industry data on the impact of the virus that makes risk analysis much easier.

At this point, no one really thinks Covid-19 will cause abandonment. said Nick Spicer, CEO of XYZ Films. Now it is about delays, shutdowns and budget overruns. Producers “are still trying to find a way to get the banks back,” he said.

Banks will not lend for the main photograph without a completion bond. A surety company cannot guarantee delivery without Covid-19 insurance. It’s a situation that has hit the world of independent cinema since the virus was declared a pandemic in March 2020, with at least 400 productions missing. Badly burned insurance companies – anticipating global losses of between $ 30 billion and $ 100 billion – are not eager to return. Without them, the Hollywood economy typically favors low-budget movies funded by private capital or projects backed by studios and streamers with deep pockets. .

Is help on the way?

The American Coalition for Independent Content Production is trying to bridge the gap. The industry group lobbied Capitol Hill for a $ 4.5 billion government fund for productions launched before June 2022 that would cover Covid-related losses incurred until June 2023.

Called the Independent Film & Television Jumpstart Fund, it would pay the lesser of 40% or $ 40 million of the budget of direct inbound costs for the disruption and 85% or $ 85 million for the abandonment. It charges a fee of 1% of the budget to participate and a deductible of $ 250,000, or 5% of any loss payment.

“This is a federal guarantee, not a gift,” said Alissa Miller of the law firm Akin Gump, who works with CAPIC on the Hill. In other words, it’s a pot of money set aside for what seems like an increasingly risky proposition. “I hope there won’t be a lot of losses, ever,” she said.

CAPIC was formed by independent production companies and completion bond companies and joined other calls for relief. A joint letter to Majority and Minority leaders in the Senate earlier this year with MPA, IFTA, SAG-AFTRA, DGA, IATSE and others said “the need for help federal government is urgent and is intensifying day by day “.

In a video made by Roland Emmerich after packaging Falling moon, the biggest budget independent film in recent years, the director noted “the serious threat to the entertainment industry.” He urged lawmakers to “preserve one of this country’s strongest export sectors” by supporting the pandemic risk insurance law. Radical legislation covering all industries, not just entertainment, was first introduced almost a year ago at the last Congress by New York Rep. Carolyn Maloney and is yet to be reintroduced into the current one.

PRIA is a complex endeavor that requires the cooperation of a reluctant insurance industry and more bipartisan support than it appears. The consensus is that it might be time to help with future pandemics, but not this one.

The Jumpstart Fund is also not going through a hectic and divided Congress, but it is making progress and the hope is that it can be included in President Joe Biden’s infrastructure program. Biden also calls the U.S. Jobs Plan and, as ACICP points out, the film, television and streaming industries provide 2.5 million jobs in 50 states.

“The government is not paying attention to us, to flip the switch, to make production more active in the United States. If they were to do that, everyone would love to shoot here, ”said Brian O’Shea, CEO of The Exchange.

To make films without Covid insurance, many independent producers have turned to private equity financing, which is more expensive than banks. This is usually limited to shoots of 35 days or less and requires a contingency fee set aside to cover a one week downtime.

BondIt Media Capital, for example, a provider of debt financing, payroll, post-production and other services, has emerged as one of the industry’s top funders, and according to CEO Matthew Helderman has funded and completed production of at least 30 feature films and televisions. projects in the order of $ 8 million to $ 10 million since last summer.

Other models include Millennium Media, which owns the Nu Boyana movie studios in Sofia, Bulgaria, where it can tightly control costs and protocols. He made at least nine films there during the pandemic for himself and Legendary producers at Lionsgate.

And Black Bear Pictures has its own fundraising arm, so it can go ahead as well. “Once we are comfortable with a project, we have the capacity to fund it internally. We don’t have to explain the risk or raise third-party capital, ”said Michael Heimler, head of production and finance. Memory, starring Liam Neeson, is currently filming in Bulgaria and Black Bear is preparing to start production on The Daughter of the Swamp King with Daisy Ridley in Canada in June.

“What we’re looking at right now is this amazing patchwork. Everyone concocts a solution of one kind or another, ”said Jean Prewitt, CEO of the Independent Film & Television Alliance, which lobbies for the industry. “What is good is that everyone is working hard to find industrial solutions. But as an industry, we haven’t stabilized yet. Nobody knows what stability will look like either. “

Across the pond and the border

Meanwhile, the UK’s £ 500m ($ 700m) film and television production restart program has launched at least 230 productions and supported 25,000 jobs and was recently extended for the third time. until the end of the year. Producers pay a fee of 1% of the cost of production and there is a total claims cap per production of £ 5million.

“The only thing stopping us from getting back to work was insurance,” said John McVay, CEO of Producer Group PACT, an architect of the plan.

He believes claims have been minimal so far which would make them a good deal for UK taxpayers. He said he did not know the number and the UK Department for Digital Culture, Media and Sport declined to quantify the claims.

Without insurance, “Everyone is scared and focused on reducing exposure. I think it’s a bad result, ”said McVay. “We wanted to do things with a hundred extras on a hill.”

PACT’s efforts in designing the program earned it a special award at the Royal Television Society 2021 ceremony last month.

Separately, as part of a unique private partnership, UK-based Great Point Media has partnered with insurer Oxford Risk Management to provide Covid-19 coverage and Reel Media to provide underlying production insurance to film and television projects they invest in.

It has the capacity to deliver production worth $ 400 million over the next 12 months, which is potentially enough for all of the more than 20 projects on the Great Point pipeline. GPM CEO Jim Reeve said coverage is available for productions “regardless of nationality or geography.”

Peter Marshall, managing director of Dewitt Stern, who put the package together, said he had provided quotes for three projects over the past week and expects to take them undercover in the next two.

In Canada, a $ 50 million Covid-19 fund set aside last fall was recently increased to $ 100 million. It had over 160 requests and, at the end of March, only four requests “for very, very modest amounts,” said Reynolds Mastin, CEO of the Canadian Association of Media Producers. It offers productions a maximum compensation of $ 1.5 million (Canadian) for temporary interruption and $ 3 million for abandonment of the project.

Steven Guilbeault, Minister of Canadian Heritage, in announcing the latest extension noted that the rate of transmission of Covid-19 on film and television sets was around “one hundredth” of spread in the wider community.

Australia’s Temporary Interruption Fund has helped 20 productions complete principal photography. “No claims have been made against the fund – as of today (April 21) no money has been paid,” said Amy Burgess, spokesperson for Screen Australia.


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