Viviana Zarragoitia, senior vice president of Three Point Capital, speaks during the “SXSW: Reel Money: The Art of Indie Film Financing” conference session at SXSW 2024 in Austin, Texas, on Saturday, March 10, 2024. (Photo by Cameron Johnson/SZNS MAG)
SXSW continued with an afternoon conference session on Saturday, March 10, called “Reel Money: The Art of Indie Film Financing.” The panel consisted of financial and legal experts Carissa Knol, Caddy Vanasirikul, Sophia Yen and Viviana Zarragoitia.
Panelists answered questions related to specific financing challenges. Zarragoitia is the senior vice president of Three Point Capital, a senior lending firm for film and television projects, and said most of the creative work is finished before she starts working and presales have been made.
“My favorite thing is when I see someone bring in an Excel spreadsheet,” Yen said, who is an entertainment attorney and partner at Manatt, Phelps & Phillips, LLP. “They are actually thinking of all the ways that the film is going to cost them more money than just what they are budgeting for production. As someone who represents lots of financiers, that’s the kind of thoughtfulness they want to see to be comfortable with someone they’re giving a lot of money to.”
From here, Zarragoitia looks at who the distributor is — especially if they’re a streamer, a known entity or an up-and-coming player.
“All of that determines the financial viability of that distributor, and how risky it is that that distributor will be around 18 months to two years when the film is done to pay us on that contract,” Zarragoitia said.
The next step is to determine what territories the film has presales in, and the number of those deals made, whether worldwide, foreign and/or domestic.
“If there’s other territories available, I’ve made a little bit more [money] because I know I’m going to have other means of recoupment once the film comes out,” Zarragoitia said.
The final piece is to work through the sale mathematically, deducting certain fees and expenses from distribution sales and determining her actual collateral at the end of the project. This includes collection account fees, sales fees, insurance, residuals, money to other collaborators and more, Zarragoitia said.
Knol, the founder and managing partner at Knol Law PC, talked about when the budget unexpectedly changes due to influences like union rates, distribution deals falling through and backers exiting the project. She warned producers to plan meticulously, think creatively about maintaining their funding and never get in a position where they’re asked to waive their fee or cut their budget to an unmanageable degree.
“You can’t just walk away either,” Knol said. “Now you have to deliver, make sure the movie gets fully made and produced all the way through post and actually gets delivered to the distributor so that Viviana [Zarragoitia] can be paid back.”
Vanasirikul, a producer at Plan-B Entertainment who holds three Academy Awards for best picture, described the inevitability of a budget shortfall in the production process, assuring that there’s always a creative solution available to them. Or, if not, honesty holds immense value.
“Even in front of 20 people — I have done it, when I ask for a bridge loan lender, to be like ‘Hello, can you please give me a discount?’ In front of 25 lawyers. I don’t care, you know?” Vanasirikul said. “I just ask, and they can say no.”
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