William Goldman’s adage that “nobody knows anything” when it comes to what will work in a motion picture to make it a success, could just as well be applied today to what will become of the now-shuttered industry after the COVID-19 pandemic has passed. With everybody in the business hunkered down for the foreseeable time, those working on the film finance end of the industry are among those wondering what happens next.
All industries believe that nothing will go back to how things were done in the past and the film world is no different. At a recent webinar hosted by The Wrap, called “The Survival Guide to Money and Hollywood”, three finance experts laid out a number of possible scenarios for the business they call show.
Given the huge appetite for streaming shows that are being satisfied currently, Viviana Zarragoitia of Three Point Capital was optimistic.
“Given how much content people are consuming right now, I think post-pandemic, people will want whatever is fresh. This could be a great opportunity for creatives and for investors, but it could also create a bottleneck,” she said. “But right now, among the problems we’re hearing about are how to retain actors who are attached to projects.”
And while streaming services are booming, she said theaters have been the worst hit.
The government announced a major stimulus package to help individuals and companies and the panelists discussed the $350bn of Federal Funds which have been allocated to small businesses, which would include individual producers and small companies.
The fact that most insurance policies do not cover Acts of God such as pandemics has created huge problems for all, but in particular, projects which are in post-production and require completion funds.
Adrian Ward who advises on film finance wondered if tax credits will still be available post-pandemic. “Bonding companies are going to hear more that delivery dates will have to be extended. Going forward, what will the landscape of tax credits look like? Will it still make sense, for example, to take a project out of California to someplace like Atlanta to avail of a tax credit? It may no longer make sense to incur the costs of setting up productions out of state just for the tax credits,” he said.
“We are learning more and more that you can do business from where you are and I think people will start to wonder about spending money traveling to all these film festivals and markets.”
Festivals such as SXSW and Sundance have announced they will be screening movies selected for their festivals on Amazon, so filmmakers will still be able to get their work before audiences, albeit in the privacy of their homes.
“In the post-Covid market, budgets will likely be coming down anyway and we might see a lot less shooting out of state,” said Ward.
Jeffrey Saks of Opus Bank also said he thinks deal structures will change and there will be much more fine-tuning.
“This is a very good time to polish scripts and develop the finance plan for your projects, including grants and tax credits, outside of just equity and the banks,” he said.
Saks also expressed concern about congestion and bottlenecks with resources and availability.
“Who will still be solvent?” he wondered.
All the financiers said this was a good time to fine-tune work and said they are all still looking at new material and can provide feedback to better the work.
“When this is over, those ready to roll will get the first bite of the apple,” said Adrian Ward.