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Film Producer

The Real Poop

Producer…the guy who brings apples and bananas to the set for snack time?

Nope. Not quite.

The average moviegoer has some idea of what most of the important jobs on a movie set are. The actor? The dude with the six pack. The Director? The dude with the keg—he makes the big creative decisions. The writer? The hairy guy—he writes the screenplay. The Director of Photography? He…um…takes pictures or something and speaks fluent union. Even if they're not quite sure, audiences have at least a vague idea.

Until it comes to the Producer.

The role of Producer is arguably the most important job on a film. It is certainly the most volatile—you can make a mint or bomb on a big budget film and end your life as a bank teller in Des Moines—or Nairobi if it was a really big budget film that died. It can be said that movies begin and end with the Producer. There, we just said it. But what do Producers do? Aside from wear $3,000 suits (which they all too often can't afford) and smoke rolled-up hundred dollar bills? Producers actually have work to do. Important work. And a lot of it.

The most important job a producer has is to raise the money that is required to get a movie made. Movies cost a lot of money. Hundreds of millions of dollars sometimes. (If you need a comparison—roughly the amount of money the Situation spends on hair products each year). Locations have to be rented, salaries have to be covered, and equipment has to be rented. If the producer doesn’t raise the money for every single expense, the movie can’t be made. It wasn’t just "movie magic" that put Johnny Depp on the big screen.

Pirate. Indian. Heartthrob.

The producer is the "inception" of the film. It is her vision, her passion, her drive that gets it made. Something moves her…enough juice to let her beg, cajole and humiliate herself in any way she has to so that her vision will get on the big screen and hopefully be shared with millions. The ideas come from anywhere—a wicked dream, a bad break-up, a snippet story in the back of Guns & Ammo: a story about the bravest mine de-fuser in the world who more or less has a death wish, hating the boring white picket fence life he had back home in the Midwest.

She researches the process, paints an outline of the main characters, blocks out roughly how the script should "break"—that is, essentially all movies follow the same formula structure. They are written in 3 Acts with 12 general scene breaks. At a certain point the reluctant main character is inextricably bound to his conflict. There's a point in the middle where he realizes his fate and then fights for it to be a good fate rather than a bad one. There’s the point where it looks like it’s all over—he’ll lose/die/suck; but then some element that is core to his character—something painted in the first scenes that rescues him and lets him return home with The Elixir. That is, Luke felt the Force and in the ultimate pinnacle of the crisis, he trusted his Feelings and it was that ability to trust that won the day.

But every producer knows this formula. They also have relationships at studios who spend oodles of money developing (i.e., not really writing fully but experimenting with writing) screenplays. The hope is that they'll stumble upon the next Star Wars and have a front row seat in securing the rights, making the film, and raking in the cash from 9-year-old boys buying Luke glow in the dark swords which make that bzzzz sound.

Can't they all just get along?

The producer usually gets money from a studio to develop a script if the executive/studio employee thinks it's a good idea. Maybe it's 50 grand or so. They hire a real writer to block a treatment (4-5 page outline of the screenplay). If the treatment goes over well, they go back to the studio to spend a couple hundred grand to hire a "backable" writer (i.e., someone who has had their screenplays produced a time or two). In return for that investment, the studio gets first dibs on distributing the film.

If the script comes in great, and everyone loves it (like one in 500 shot kind of thing), then it eventually may get a green light to go into production. The producer then has a fork in the road depending on how the film was green lit. It could be that the studio will fund the film itself; these days more often than not, the producer herself must come up with other investors.

In the case where the studio ponies the money, the math is relatively simple; if there are outside investors, the producer has to give them…something in return for their risk capital money that is put up in the beginning. The give can be anything from "DVD rights in Germany, Spain, and Italy" to "All theatrical feature rights in Europe" to "5 per cent of gross profits from pay television sales in Asia."

Zip forward. The film is made. It comes out. It cost $50 million for prints. It cost $15 million for prints and advertising. "Above line talent" gets 10% of "gross first dollar" profits. That is, from the first dollar that comes back to the studio, Brad Pitt, Steven S., and gang together get 10%—their agents and managers can figure out who gets exactly what when they go back through the contracts that were originally cut.

So the film runs in the U.S. and makes $200 million from theatrical box office. In the rest of the world, it also makes $200 million. You as producer: "OMG, I'm rich." Well…maybe.

The numbers are highly misleading—people in Hollywood actually make a LOT less dough than the average Joe thinks. From Box Office gross, the revenues are usually split—the theaters keep about half and the distributor keeps about half.

So on $400 million of total sales, the zillion theaters out there that played the film kept about $200 million (add popcorn receipts to them, btw) and the studio kept about $200 million.

But how did the theaters agree to show the film during those valuable Friday and Saturday night summer venues when they knew they could throw up just about anything, including the home movies from Aunt Myrna and teens would have put their butts in seats? They put the movie in there because they trusted that Disney, the distributor, would have more movies in the future that they would care about—and the muscled Disney distribution exec said, "You will take this film on these terms for five weeks…or else." The exhib gulped and did what Disney wanted.

And it worked out—both made money.

So Disney distribution took $200 million from the exhibitors. Awesome. But in return for its muscle flexing, Disney distribution took 30%. They kept $60 million in return for selling the film into theaters.

Well, okay, great—there’s still $140 million left. All profit, right? Nope.

They have to pay back the costs of making the film first—that was $50 million plus the $15 million for prints and ads. And since the money was loaned years ago, it had interest costs—what, the studio should loan money for free? This isn't a bankrupt GM we’re talkin' about here.

So add $10 million in interest costs.

And oh, by the way, in order to get Brad and Steven, there were 10 points of gross first dollar costs as well. So take off 10% of $140 million as well.

To review:

140 – 14 – 65 – 10 = 140 – 89 = 51

Or…$51 million in profits now.

Yay. Wampum time. Well…kinda.

The producer doesn't keep all of the profits. In fact, because the studio loaned money in a very risky deal, they will keep a very large part of the profits—maybe half or more. If the producer had raised all the money from outside, then she and her investors would keep the profits—but it doesn't happen that way very often.

So the producer keeps, say $25 million. Awesome. But the producer had a 3-picture deal with the studio. Two of her films kinda sucked and each lost $10 million. So the producer in this common "cross-collateralized" deal has 25 – 10 – 10 = $5 million in real profits.


Yep, $5 million is a lot of money—but this is a crazy outlier hit, an almost once in a life time Lottery Ticket home run. And it took the producer 4 years to make it all happen. So she made $1.25 million (pre-tax) per year for 4 years. That's…nice. But a 3rd rate hedge fund manager's junior fetch-it guy makes more than this in a medium year.

But wait! There's more!

DVD rights. HBO fees. Prime Time!

And typically the producer would get incremental shares of profits as each of those "windows" are sold. And yeah, there are even a few pennies from Netflix.

So it’s great…sometimes. But the money is usually a lot less than most of the popcorn eating public thinks it is.

And there's another element in the process of movie-making that matters—fancy $5 word is "purview." For most, the IDEA of making a movie is awesome; the practical reality is more like halfway between watching paint dry and reading the iTunes legalese at the bottom just before the ACCEPT button.

The LEAST involved, generally, is the actor—she shows up caked in make-up so she still looks 19; the shoot happens for seven weeks and then she’s gone. But others have been involved much longer—and basically the further away from the camera focus lens, the broader the purview…. A producer is almost as far away as one gets from the film making while actually still touching it. The agent, manager, and studio exec have even broader views on the process.

A producer's job actually starts before any of this big fat process begins though. Many times the producer is the one who picked the movie to make in the first place. They read zillions of scripts, tearing through pile after pile of really bad ones until they find something that’s good. Well, maybe not good, but at least something that they think will make money, i.e. Michael Bay’s next expensive summer would-be hit. They have to take into account what types of movies have been making money and what types have been losing money. They have to think about which actors are auditioning which kinds of roles. They have to imagine how much the scripts would cost just from reading them. It's a little like reading the future and a lot like gambling. The better at predicting the future you are and therefore the less gambling you need to do, the better a Producer you'll be. And the more Vegas will hate it when you come to visit.

Finding a script that they think will be a success is only the first part of the equation. The next comes in securing the money. They now have to convince other people—people who have massive amounts of money to throw around and are pretty smart financially—that this script they’re passionate about can be successful. This feat can be harder to achieve than convincing your parents to let you stay at your buddy Joey's house when his parents are out of town. They never did like Joey. Maybe it has something to do with his extensive criminal record.

To make matters more difficult, the realities of film funding change more often than Lindsay Lohan's hair color. In the '80s, it was about pre-selling films to theatrical and home video markets to raise the money. In the '90s, it was more about packaging your films with bankable stars and getting funding from foreign investors. All throughout, producers were making much of their money on "back end" deals. No, that's not an obscure position in football. It meant that producers would take their payments as a percentage of the film's profits. Although they probably would tackle anyone who got in their way.

At the beginning of this millennium, the back end deals began to dry up. Independent funding for movies died. Wall Street investors realized that the film industry was just too risky and started pulling their money out to invest in more stable businesses like real estate and automobile companies. The film industry today is dominated by the studios at the top, bigger production companies underneath them, and foreign investors underneath them. In short, it's dominated by "the Man." The sources that a producer has to turn to for financing are a bit like the guys who don't have a crush on Scarlett Johansson: Sure, they're out there, but you'll have a really hard time finding them.

Many producers luck out and have a reliable stable of investors they can approach. These contacts are made when climbing the ladder. Producers often start in another position on a film, maybe as writers, directors, or actors. Others intern with production companies or work for years as the personal assistants (also known as "minions") for high powered producers. Contacts can be invaluable when it comes time to hold out your hand and say, "pretty please?"

There are other duties that fall to producers, and so there are different types of producer credits. Associate Producers, for example, aid producers in many aspects of their work and may be responsible for securing name actors, supervising post-production (the editing of a film), or working with the special effects crew (so if you want Avatar to look like something more than a bunch of guys dressing up as Smurfs and dancing around in the forest, you may want a good Associate Producer to keep those SFX guys in line).

No matter what a producer actually does, they are possibly the most behind-the-scenes of all of the crew members. A producer's job is kind of to be the ultimate support staff. They make sure that all of the political and practical aspects of the shoot run smoothly so that the creative people (like the director) can remain focused on the storytelling. Not to say they have no creative input. They assembled the director, the writers, and the cast, after all. Some producers will even dictate certain stylistic choices to the director or plot points to the writers. But, at the end of the day, the storytelling should be out of their hands. If making a film were a football game, producers would be the coaches. The quarterback would be the director. The running backs would be the actors.

And the guys in the stands with their faces painted and wearing blocks of cheese on their heads would probably be the camera crew. Those guys are nuts.