What are set fees: Producer or Executive Producer

Belief Pictures said:
I was wondering in the case as an Executive Producer where I hire a Producer who I'd be co-producing with. If say we raised $100,000.00 or even $1,000,000.00. How much could I take as E.P.?
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I'm not sure you understand the film biz and budgeting process here... the executive producer is typically the guy who puts up the money. He doesn't take anything out of the budget, he supplies the budget.

On a $100k budget, if you're thinking of taking any salary at all, you're doing so to the detriment of the production. A hundred grand isn't enough for the producer to be taking anything substantial at all. You'd be getting paid in points, not cash.

If you raise a million, then you're talking about being able to take a fee out of that, obviously.

The producer is the businessman or businesswoman who owns the film and hires everyone in it. The producer is the one who raises money from executive producers (or gets a studio exec. producer to greenlight the film for production). The producer owns the production company that owns all the film rights, and typically parcels out chunks of ownership to investors. In a model scenario, the producer hands over 50% ownership of the company in exchange for the money to make the film. The producer makes all executive decisions about hiring the director and cast, does all fundraising and contract work, and manages the money and the business. It is the producer's job to sell the film after it's made.

If you're just trying to make a salary, producer is the wrong job to be looking at. At the micro- or mini-budget level, the producer is likely to never see a dime until the film is successfully sold.
 
Barry, i disagree that on 100k you should not pay yourself a salary. It's just asking for trouble. I have this suspicion that one of the reason why so many indie films are the way they are is because people simply skimp on their own salary and go into the edit room after 8-10 hours of their day-job. Yes, you gotta do what you gotta do but it should be an honest set-up you get paid but you are also committing 8-10 hours every day to the film. That way your film will be finished much quicker and the whole film won't loose its steam.
 
The guy's talking about working three years on a film that might have a budget of $100k. What kind of salary can he expect to draw?? That's gonna be a day-job scenario no matter how you slice it. Even if he took a pathetic $2,000 per month, that'd eat up $72,000 over the course of three years.

I know exactly what you're saying and I do agree in principle, I just don't think this is a realistic discussion for Belief Pictures at this point in time.
 
Didn't read part about it taking 3 years... Why 3 years? If you pay yourself you should have an edit done in 3-4 months after the principal photography wraps.
 
I based that on this quote:
Keeping in mind I'll be working on this film for three long years starting very soon!
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Presumably that means the entire process from starting to write the script, to final edit?
 
Barry_Green said:
The guy's talking about working three years on a film that might have a budget of $100k. What kind of salary can he expect to draw?? That's gonna be a day-job scenario no matter how you slice it. Even if he took a pathetic $2,000 per month, that'd eat up $72,000 over the course of three years.

I know exactly what you're saying and I do agree in principle, I just don't think this is a realistic discussion for Belief Pictures at this point in time.
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Barry why do you say that?
 
If you haven't already, you really need to put together a budget so you know where you have to spend your money. Without budget, you might as well throw darts at a board.
 
Belief Pictures said:
Barry why do you say that?
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Well, like I said -- if you're planning on $72,000 of the film's $100,000 budget going into your pocket -- no investor is going to finance something like that. It's just totally unrealistic.

The harsh reality in indie film is that people do not get paid to make independent films. Independent filmmakers pay to make them.

As Blaine said, you really need to put together a proper budget that shows where all the money is going, and that will help enormously to quantify what you may or may not be able to draw from the budget.
 
Barry_Green said:
I'm not sure you understand the film biz and budgeting process here... the executive producer is typically the guy who puts up the money. He doesn't take anything out of the budget, he supplies the budget.

On a $100k budget, if you're thinking of taking any salary at all, you're doing so to the detriment of the production. A hundred grand isn't enough for the producer to be taking anything substantial at all. You'd be getting paid in points, not cash.

If you raise a million, then you're talking about being able to take a fee out of that, obviously.

The producer is the businessman or businesswoman who owns the film and hires everyone in it. The producer is the one who raises money from executive producers (or gets a studio exec. producer to greenlight the film for production). The producer owns the production company that owns all the film rights, and typically parcels out chunks of ownership to investors. In a model scenario, the producer hands over 50% ownership of the company in exchange for the money to make the film. The producer makes all executive decisions about hiring the director and cast, does all fundraising and contract work, and manages the money and the business. It is the producer's job to sell the film after it's made.

If you're just trying to make a salary, producer is the wrong job to be looking at. At the micro- or mini-budget level, the producer is likely to never see a dime until the film is successfully sold.
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Barry I am the Executive Producer because I want to control the whole thing from editorial to creative. I am also the director and film editor. I own the production company (we are incorporating) so any producer I hire owns nothing. They work for me. I understand what you're saying and I agree at $100,000.00 there isn't a lot for anyone to really take a significant salary, including myself but this would be 10 times the budget I had last time so still significant none the less.
 
Patryk_Rebisz said:
Barry, i disagree that on 100k you should not pay yourself a salary. It's just asking for trouble. I have this suspicion that one of the reason why so many indie films are the way they are is because people simply skimp on their own salary and go into the edit room after 8-10 hours of their day-job. Yes, you gotta do what you gotta do but it should be an honest set-up you get paid but you are also committing 8-10 hours every day to the film. That way your film will be finished much quicker and the whole film won't loose its steam.
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Good point also being if you don't pay yourself intitally like everyone else you probably won't see it ever! You should be paid like anyone else even if it represents a smaller sum. That's just what I think.
 
Blaine said:
If you haven't already, you really need to put together a budget so you know where you have to spend your money. Without budget, you might as well throw darts at a board.
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Putting together a budget is a process and does take time. That is what pre-production is all about.
 
Eh

Eh

Belief, that's not quite realistic unless you only want to hire a line producer, and that's going to get you only so far.

What these guys are saying is correct -- investors get 50% of the film, producers get 50% of the film. In my case, I served as writer-director and executive producer, funding the film, so I maintained a slight majority share (it's my movie) but the producers got their portion of the film for making it all come together. It's a reasonable and fair arrangement, don't get freaked out by that, sometimes you get so concerned about your share of the pie you forget that it doesn't matter unless it's a really good pie ;)

I get paid back first anyway, before any of that even matters, but Barry is also right to say that salaries aren't really paid to the producers because there's not enough money to go around at that level. You're all looking for a successful sale, which means if you can interest outside producers in your project you may really have something. That was, for me, a big step anyway. We did have to pay me the minimum as director, at least in the budget, because I joined the DGA on this film and I couldn't opt not to pay myself. But I deferred all of my writers pay, I'm not WGA, so I could do whatever I felt like with that situation.

An indie film is like a lottery ticket in some senses, not saying it's super impossible to make your money back, only that it's like betting on a race horse basically, you hope yours is going to come in first but a lot of people are doing a lot of work for very little money, then the people at the top are probably working for nothing but the prospect of future earnings. They really have to believe in the project for that to make sense to highly professional people...
 
Hey I get what you're saying. I guess how much of the pie an investor wants very much depends on that investor and hoe much they contributed. All I'm saying is I'm not working for free. No one really does. There is no deferred pay on this film. I did that on my last feature. It was an absolute nightmare. If I got someone else to do the jobs that I am doing they'd expect to be paid so why shouldn't I? My co-producer (if I hire him) wants $100,000.00 for his cut so why shouldn't I get a comparable cut? I wrote the script and no one is getting access to that for free. I am the editor and director not doing those jobs for free. I don't mind keeping my fees at a modest level but working for nothing is absolutely nuts. I might as well work at Walmart @ that point!
 
You are correct on all those points. I guess all I'm saying is -- if you do expect reasonable compensation for all those jobs, I think you're going to require a lot bigger budget than $100k. Either that, or you're going to have to find a way to get all the jobs done in a very much shorter timeframe.
 
The biggest producers (and talent) in the business are working deferred on a somewhat regular basis. It is done. Granted, the best publicized cases are where the players are A-listers who are literally gambling on high-concept, studio feature deals like cash-breaks and so on.

That isn't you. You need to figure your personal financial needs for the next six months or three years (or whatever your timeline is) and add that into the budget. With micro-budget pictures - especially one set at $100k, the picture will suffer for your draw. Even taking a tiny salary of say, $2k per month, you're going to be at $10 - $12k by the time any footage is in the can.

The appropriate starting point, as it is with any movie, is to break the screenplay down and budget accordingly. Line producers exist because even the most savvy producers and directors need accurate numbers and they are largely incapable of getting through a budget on their own.

Budget needs to be real-world, investor-defensible numbers. One thing is for sure, saying you've got $XXX to spend and shoehorning a picture into that spreadsheet is absolutely the wrong way to go.

A note on incentives. These white-hot 40% (rebate model) states cannot sustain the business - even in a fraud-free environment. The break-over point is closer to 25%. More and more states are discovering this the hard way. The Iowas, Louisianas, Michigans and New Mexicos will all repeal the higher programs at some point. While California has seen billions of gross production dollars leave the state for these "film-friendly" destinations, the net revenue the state has lost is appreciably lower.
 
Erik,

My personal fees are a little sketchy until we have a firm budget with numbers we can depend on but in Manitoba, Canada they are offering a 45% tax credit back as part of their incentive. I'm goign to take advantage of that and it is easy to qualify for.

Chris
 
You sure you satisfy the minimum budget requirement? A good many here in the states only kick in the >$M ranges.
 
Hmm

Hmm

Yeah some states here it's $1M or higher, some it's a bit lower, in CA there is no minimum -- the 25% rebate for filming in CA just came about last year I believe, this is entering year 2 of the program. We looked into it but we had to film when we did, so no go.

On a tiny budget, it's true, there is really not the money to be paying everyone what they are worth. People complain that the crew is underpaid, which they are, but heck often above-the-line is even more underpaid until the film actually sells. Then you just never know.

I don't feel bad about that situation whatsoever, though. The crew chooses to work, yes I wish I could pay them more, absolutely, but I took the financial risk and if the film is a huge hit I deserve the windfall for that, not the crew. They didn't risk anything more than two weeks of their time, which I completely 100% appreciate, but that doesn't earn you rewards if the film is a big hit. What it means is you get hired again, hopefully at your fair going rate -- and I'd love to hire the good crew again and pay them full. Nothing would make me happier.

I'm sure many people here could tell you this, but if you want to be paid fairly for everything you do and get paid for every job, indie filmmaking may not be the right path for you ;) It's a lot riskier than that, and you have to do things for passion sometimes before you can get someone to pay you for them.

Erik, I can't agree with what you're saying, though. A lot of times you have X amount of money and that's it, that's the budget, that's what you can spend. You have to make sure the script makes sense for the budget, but to say that's the wrong way to go is wrong. I wrote my script, I knew what I had to spend, so I knew I was writing for roughly that budget. You make sacrifices to make a film on any budget, especially a low one, but it doesn't mean you budget it and say, "Oh, darn, I have $200,000, it will cost $250,000, guess I can't do it!" You find a way to do it for $200K. Be creative.
 
This is the industry for me. This is my second feature film not my first. You act like I don't know anything. I do agree realism is a good idea. I am flexible with my fees but only idiots work for free. I don't expect my actors to work for free so why would I? If my producer wants $100,000.00 for his share you can bet I am goign to take a fair chunk. Why not? I am part of the team... aren't I?
 
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