Film Money, Going Out the Door Faster than Mortgage Payments

By Steven Zeitchik

Film-financing types declaiming about the need for change in their field is about as common these days as an investment banker starting a Prozac regimen.

But some impressive voices made themselves heard when we were up in Boston earlier this week covering and moderating panels, including one with Jeff Zucker, and watching Marshall Herskovitz go bleak about the "quarterlife" experiment on NBC.

They're worth hearing, if only so that the next time someone gives you the 'There are too many movies' speech, you can say, 'But for how much longer?' (You can also file it under 'And they expected things not to be this way why exactly?')

A few nuggets:

Former Warner Independent prez-turned-film funder Mark Gill: "It's really ugly out there right now. You were seeing them (new film funds) twice a month. After us came United Artists and then the door slammed shut."

Former Sony Pictures prez-turned-J.P.-Morgan film-funder Alan Levine: "These guys who came to Hollywood from Wall Street thought they were entering a portfolio business. (But) they were making an investment that were not correlated to a lot of other businesses."

Beacon Communications producer Armyan Bernstein: "A film studio is the
best asset to own because they control distribution worldwide. But these forms of capital (entered these deals) thinking they'd be partners with studios. And they're not."

Cited as a reason why these deals weren't working out -- in addition to that nagging fact that the movie business has none of the fundamentals and predictability of a more stable industry like, say, the oil business --is the way the funds were set up in the first place.

And how was that? With too much risk and not enough flexibility for the investors. In other words, it's the strucuture, stupid. Selection kills a lot of investors, and when they don't, the movies do. "You gotta have all films and all good news," said Levine." And most don't."