Top Finance Secrets From a Film Producer

Monetizing movies might seem like trying to mix oil and water: How do you evaluate a film — a complex web of ideas, equipment, roles, rehearsals, and stakeholders — in terms of dollars and cents? How much would iconic classics like Casablanca or The Godfather be worth today? What makes a movie a worthy investment? Most importantly, how does one make a profit from talent?

Budgeting and creativity rarely go hand in hand, which makes Jim Agnew an anomaly. Best known for The Capture, Rage (starring Nicholas Cage), and Game of Death (starring Wesley Snipes), Agnew also has a knack for the tricky fiscal game of filmmaking. Without knowing the nuances of the business, it’s easy to lose money — but understanding the rules of the game can lead to millions.

These rules boil down to three general principles:

1. Target a global genre

What many people don’t realize, according to Agnew, is the significance of territory when selling and distributing films. There are two major territories: domestic (U.S. and Canada) and foreign. Thrillers, horror, and action films are the most versatile since they “translate to foreign markets,” says Agnew. On the other hand, comedies and romcoms are severely limited in their global outreach because “what’s funny in America is not funny in Thailand […] but anyone in the world knows what a car chase is.”

In other words, the film needs to resonate on an international level to even reach the threshold of scoring a profit. If you do make a comedy, says Agnew, it has to be that much more of a hit to make up for half the territory lost in translation.

2. Hire an experienced crew

Imagine that you hired the Girl Scout selling cookies next door to bake your wedding cake. While she might, on the off chance, have a knack for the culinary arts, you would be making quite a gamble. 

Though it may seem obvious, it’s even more of a risk to hire an inexperienced crew when producing a movie. Yet it’s a mistake Agnew sees indie filmmakers falling into rather frequently. For instance, writing a script may seem easy in theory, but it’s really a science. “Just because you can drive a car doesn’t mean you can fix it,” Agnew analogizes. “It’s a lot more complicated than that.”

This means that the crew — from the screenwriter to the cameraman — has to know the nuts and bolts of what they are doing. If you’re competing with professionals, you have to be a professional.

3. Secure a star

The greatest launchpad or setback of a film, according to Agnew, is the actor. While it might be tempting to save money by casting a promising, starry-eyed graduate of NYU drama school, it’s best to “take all your money and get one big actor who will cover the whole investment of the movie.”

But how can a small, independent film producers protect their investment? One trick, according to Agnew, is to obtain a minimum guarantee (MG). If a producer can secure the right cast, with the right script, at the right budget price, a distributor will promise a sum (the MG) that can, in some cases, cover the funding of a big-name actor or even the entire cost of the film before filming even begins.

Also, while investors must account for sales agents and guild residuals (which can consume around 20 percent and 6.2 percent, respectively, in royalty fees), up to 30 percent of the entire film budget can be reimbursed by casting and shooting in a rebate state such as South Carolina or Mississippi.

The filmmaking business is a small world built on a volatile economy. As with anything, it takes hard work, persistence, and an all-or-nothing mindset. According to Jim Agnew, “Everyone has to step up to the plate and make a home run.”

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.