OK, so before you start screaming “chicken before the egg,” this article is not about attaching talent without having financing. This is an examination of the values behind attaching name talent.
NOTE: we’re not considering the break-out indies that win awards at Sundance and SXSW. While we love those movies just as much as the next person, from a risk point-of-view, those films are the exceptions to the rule. Since our articles focus on safe film financing and packaging, this article will focus on the presale and minimum guarantee (MG) values as defined by major distributors.
One of the most common mistakes made by green and new-ish filmmakers is assuming larger than realistic marketplace valuations on their talent wishlist and/or talent attachments. And these misunderstandings often revolve around the assumption that “name talent” and “bankable talent” are synonymous; they’re not. Now, this is a delicate topic because while it’s a fact that certain names are worth more than others in sales–and are therefore considered assets by distributors and sales companies–it remains that they’re still human beings with emotions, so we will not be specifically discussing any actors’ marketplace values by name. Furthermore, it would be reckless to discuss any specific names since valuations are constantly changing, and this article would therefore become outdated in a matter of months, if not weeks.
Before diving into the various scenarios, let’s first get the definitions out of the way. “Bankable talent” are name actors that major distributors and buyers know hold value, and will bring fans to theaters and encourage audiences to click “rent now” on their TV-VOD. “Name talent” are actors whose names are readily known nationwide and/or globally. The important distinction here is that “bankable talent” is a subset of “name talent,” but not all “name talent” is “bankable.”
In reviewing submitted packages and wishlists, we see there are three common talent types where the filmmakers expect valuations much higher than what the market can justify: current TV actors, well-known character actors, and oversaturated names. We will briefly discuss the definition of each of these categories, the common marketplace value misconceptions, and the realistic expectations.
The fact is, television and feature films are two distinct marketplaces where in terms of talent, value can easily flow from film to TV, but TV value does not immediately translate in the film sales world. In other words, and to put it bluntly, actors who are on popular television shows (even those running for several successful seasons) do not inherently bring strong sales projections when attached to movies. The obvious exception to this rule however, is if the TV actor also has a successful film career… but in those instances, we wouldn’t consider them a “TV actor.”
We frequently see packaged projects seeking financing that have an absolutely stacked cast with incredible talent, but where all the actors are primarily TV actors. This is not a problem inherently; it’s only a problem when the proposed budget exceeds the actual value as defined by distributors. And it’s extremely common for first-time filmmakers to over-budget their films well into the 7-figures.
Fun fact: Did you know that more than 50% of feature films produced and distributed each year are produced for less than $1MM?
The most common North American presale figures we see on films packaged with TV talent range anywhere from $10,000 to $100,000. Now, if you’re shooting in a tax incentivized location, and are producing a bankable genre picture [like action or thriller], and with a reasonable budget (for example, financed along the lines of the 20/30/50 finance structure), then your N. American presale figure should come in around 30-35% of your total budget. That means a $50K US domestic presale would safely justify a total budget around $170K. That is a small budget! And here’s more food for thought: just because a TV show is popular in the USA, that does not mean that it has been syndicated globally, so your sales value may be below average in some territories.
There is, however, an exception to every rule. If you’re producing a made-for-TV movie, the network you’re targeting as your film’s US home can significantly adjust these numbers, as many networks have their own demographic ecosystem that will spike your film’s value in the eyes of a specific network. For example, Lifetime has a predominantly female audience, many of whom are stay-at-home. So, a strong female-driven thriller might make them excited, and since their audience’s interests are well-understood by the network, a North American presale could suddenly justify a budget of more than $500K. Yet another example is Hallmark for family films. Again, they have a specific and loyal audience, so for the right movie, you may be able to justify total budgets north of $1MM.
All things considered, know that if you’re packaging strategy is purely focused on television talent, you may need to work on a serious budget. The good news is that strong TV talent want to do features, so if you’re sitting on a fantastic script and are genuinely passionate about your project, getting amazing actors on a tight budget can be very realistic.
“He’s that guy from that movie.” If you find that you have to utter those words to film investors, chances are there is little presale value in the respective actor. There are so many fantastic actors out there who we’ve been watching on screen for years. They bring true color to their characters, and in retrospect, some of our favorite movies wouldn’t glow in our memories without these actors’ contributions. Unfortunately, their participation in a film [and their face on a poster], either (a) has not historically generated any quantifiable sales, or (b) they’ve never been given the chance to have their name and likeness on a poster. This matters because one thing everyone needs to know in independent film presales is: distributors do not take risks. Presale and MG values are predicated wholly on historical data, and never involve serious speculation. There’s a reason why all the major studio buyers hire mathematicians.
All is not lost however! Attaching well-known character actors still brings serious value to a young production. Well known character actors are always open to new opportunities, so you’ll find there’s a lot less red tape to cut through when trying to attach them. What’s more, many of these well-known actors are very well-respected by their peers, so having these attachments can immediately elevate your project to a “pre-vetted” status, thereby making your future bankable attachments that much easier. Remember also, that these actors have probably been working for quite a while, so it should not be out of the question to discuss offering them “executive producer” positions if they’re willing to help you bring more names to the project.
This might be the most common scenario we see from first-time filmmakers: attaching indisputably “bankable” name talent who are simply in too many recent movies. As the basic laws of economics dictate, supply and demand are the determining factors in establishing value. In the film industry, these laws are no different. To illustrate this fact, let’s consider a fictitious scenario.
Let’s say you attach a name actor–someone who another producer may have said something like “I cast them in my movie three years ago, and I got a $200K MG for US as a result.” Now, let’s say that in present-day, the same actor is currently attached to over 40 films. That may sound unrealistic, but a little light digging on IMDb will prove otherwise. OK, so we reasonably know that this actor was bankable three years ago (based on the aforementioned fictitious conversation with another producer), but from a distributor’s point-of-view, there’s a dilemma. Due to the sheer quantity of films the actor has recently been in, a distributor is going to look at all those other titles as competition for the same eyeballs [and wallets]. In other words, the supply has overshadowed the demand, and the value therefore goes down. Another more dangerous scenario is where the distributor may already own one or more of those recent titles, so from a revenue standpoint, they may look at picking up your film as cannibalizing the potential revenues on the ones they already have.
As a side note, it’s also troubling to see another symptom with which first-time filmmakers are afflicted: they end up severely overpaying for those names. Agents have a duty to their clients, and they’re good at their jobs. So again, the laws of economics dictate that paying more than market value can be the same as bringing no value at all. For example: a fantastic holiday film package came to us years ago that we negotiated to presell to Grindstone | Lionsgate. Unfortunately, prior to S&R coming on board, the filmmaker was encourage to [literally] pay twice the actor’s value. Those fees were already escrowed with the agency, so renegotiating was near impossible, and as a result, the project was subsequently shelved indefinitely. Wth such a steep price-tag vs market value ratio, there was just no way we could make the numbers work.
The only way to really avoid casting/valuation mishaps is to get the values from buyers. There are some sales agencies that provide accurate estimates, though these are generally the sales companies who also provide financing, and therefore have no motivation to inflate projections. Be careful when reviewing projections from sales reps who are not putting financing into the picture–there is motivation to boost the figures to encourage signing on the dotted line.
Some of the sales agencies we wholeheartedly trust include all the major agencies for domestic (WME, CAA, UTA, etc), and international companies such as Green-Light International, XYZ, Content Media, IM Global, Insurgent, Voltage, and Red Granite.
When evaluating our productions and our clients’ films, S&R Films leans on its relationships with trustworthy distributors such as Grindstone | Lionsgate, MGM, Sony, and XLrator in order to establish defendable North American sales figures. Internationally, we do spot-testing by contacting several of our major-territory buyers. If you’re interested in S&R assisting your production in sales valuations, and cast packaging, feel free to contact us; we’re always open to new clients and exciting projects.