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FEATURE FINANCING: GOING FOR GRANTS HAS BACK END BENEFITS

Many doors swung open for writer/director Neil Triffett and producer Lee Matthews as a result of the short film EMO the Musical being selected for the Berlinale and subsequently earning a special mention from the jury.

The quick read

That was in February 2014 and two-and-a-half years later the feature film version of the satirical high school musical had its world premiere at this year’s Melbourne International Film Festival.

The filmmakers are now focussed on the 2017 release. This case study is predominantly about how the feature was financed.

EMO the Musical cost $1.9 million with a significant slice being private investment from the filmmakers and related parties. Much thought was put into how the nature of the financing would affect the way revenues flowed: if Screen Australia had provided one more dollar in addition to its $500,000 contribution, for example, that funding would have become an investment and therefore repayable, rather than a grant. Film Victoria, another major supporter, assigns its investments to producers as a matter of course.

Going down the grant route with the federal agency also delivered more flexibility, which was why the film was able to secure federal government financing without an international sales agent attached.

Huge thanks to producer Lee Matthews for his openness.

<em>EMO the Musical</em> EMO the Musical

Title EMO the Musical
Genre Satirical high school musical
Financed by Screen Australia, Film Victoria, the Melbourne International Film Festival’s Premiere Fund, private investors including the creative team
Distributor Bonsai Films
Sales agent To be advised
Synopsis Ethan is expelled from his private school after a laughable suicide attempt in the courtyard. On the first day at his dilapidated replacement school he meets Trinity, who is desperate to convert him to Jesus. But he wants to join the school’s alternative rock band and be part of the Emo clique. A turf war between the Christians and the Emos threatens to spill out into the state school rock competition.

<em>EMO the Musical</em>

<h6>Lee Matthews</h6>
Lee Matthews

From the producer

“While completing my one-year postgraduate in producing at the VCA (Victorian College of the Arts) I saw the short film Sarah, which Neil Triffett made as part of his three-year undergraduate course. I bounded up to him and insisted that I work with him – and ended up producing his graduation film Shoplifting. We both graduated in 2010.

“We continually workshopped a range of possible projects and unsuccessfully pitched a couple of TV shows. Then Neil proposed a short film concept – a musical no less! – based in part on his own experience of fitting in at high school. We filmed EMO the Musicalsee it here – in 2012 for about $10,000 and later successfully applied to Screen Australia for an additional $40,000 for completion funds, the most available for that purpose under the agency’s then short film fund.

“We submitted the short to the 2014 Berlinale and our lives changed when we were lucky enough to be selected. To create something that a top tier festival is interested in meant we were elevated against our peers. It evoked confidence. I don’t know how many shorts were submitted but my various rejection letters from Sundance say ‘thanks for being one of 6,500 films, sorry you weren’t accepted’.”

“Not high concept but out of the ordinary”

“We knew we had to make the most of having that brief attention on us so we went to the Berlinale with a script for a feature adaptation in our back pocket. We never actually showed it to anyone though because we realised while we were there that it wasn’t quite market ready. People liked the concept.

“We won a special mention for the short from the youth jury in our section of the festival, Generation 14plus.

“On our return we secured development funding for the feature from Screen Australia and later Film Victoria. This allowed us to engage Sam Jennings as script editor and the script changed enormously as a result of her wisdom and skill. We had something that wasn’t high concept but it was out of the ordinary – and that was one of the differences that I celebrated and built my confidence on.

“We received expressions of interest from three key sales agents when we shopped the script around at Cannes in May 2015 but with Neil being a first-time director, they didn’t know if we could necessarily realise the film even though we had a short to help communicate the style and tone. None would put their hands in their pockets for an advance of more than about $25,000 for rest of world.

“Back home, it was very very hard to get local distributors to return my calls. I’d been involved in what was pretty much a no-budget feature (The Heckler) and this was my first fully funded film. I’d produced work for the ABC and 15 short films but wasn’t recognised by most distributors. Jonathan Page of Bonsai Films loved the project and put up an advance of $25,000 for Australian and New Zealand rights.”

“EMO could not have been made without my own financial commitment and the commitment of friends.”

Originally the budget was set at $1.5 million

“I took the lead from Graeme Mason (Screen Australia’s chief executive) on the original budget.  He’d been saying at public forums at the time that $1.5 million was the new $3 million. I understood why that made financial sense in the current market and, because I come from the smell-of-an-oily-rag short film world, $1.5 million was a lot of money to me.

“The film is ambitious: it has a large number of characters and a first-time director that needed the time and space to go for extra takes. We stuck with a six-week shoot but many tried to talk us down to five weeks, which would have saved a fair bit of money. A production accountant did the budget with me and it was set at $1.5 million. But after consultation with Screen Australia and, to some degree, Film Victoria, we financed the film at $1.9 million because they pointed out why some aspects of the budget were unrealistic and why more money was needed if I was to responsibly go into a production that I could deliver.

“In my final finance plan, Screen Australia provided $500,000. With the producer offset (PO) being set at 40 per cent of QAPE (qualifying Australian production expenditure) it delivered $670,000. Fulcrum Media Finance cash flowed 90 per cent of this and I cash flowed the remainder. Film Victoria came in at 10 per cent of the Victorian expenditure in the budget which amounted to $184,000.

“Half a million dollars is the most Screen Australia will make available as a grant and funding from Film Victoria is treated as assigned production investment, which means all three amounts do not need to be repaid.”

 “I know how hard it is to get the bigger distributors to commit.”

A reshaping of the finance was investigated

Director Neil Triffett on set Director Neil Triffett on set

“The short film had done so well and everyone seemed to love the project. There was a hiccup though in mid-2015 when we applied to the MIFF (Melbourne International Film Festival) Premiere Fund and the decision was deferred. They believed the project wasn’t quite ready. Later, when we did get this support, we were offered five per cent – $90,000 – rather than the hoped-for 10 per cent. This meant we had a $90,000 gap.

“I was already funding a $210,000 gap and Neil and I had each put our fees into the film so we had been pretty anxious about the Premiere Fund deferring. At that time Screen Australia had very supportively offered some ways of reshaping our financing. One option was that it would put up $600,000 instead of $500,000 which, under Screen Australia’s terms of trade, would have changed it from a grant to an investment. We (the producer, writer/director and the other investors on board by then) already had a couple of hundred thousand dollars to get back (outside of the PO cash flow) before we could break even. If we’d taken the investment option we would have had nearly $1 million to repay.

“The rough rule of thumb is that only a third of local theatrical box office revenue flows back to the distributor and, once the distributor’s expenses have been repaid and the commissions extracted, on to the investors. If the Screen Australia money was classed as investment, to repay nearly $1 million would mean the film would have to gross at least three times that amount, which was three times our original forecasted box office. I decided to plug this $90,000 hole myself in partnership with a friend. EMO could not have been made without my own financial commitment and the commitment of friends.

“It was always our intent to run a crowdfunding campaign and we raised $48,000. I regard crowdfunding as essential because it validates the project and effectively builds an audience, an online community. But you have to have the confidence to walk up to your mates and say ‘Can you get out your wallet and give me 50 bucks?’ because that’s effectively what you’re doing while hiding behind email and social media. You also have to have enough personal contacts to raise at least half the money so others will chip in. It’s a lot of hard work: it took a month full-time for three of us. I believe in crowdfunding but would love not to have to do it many times.”

 “If the Screen Australia money was investment … the film would have to gross … three times our original forecasted box office.”

Gearing up to get EMO out there

“Jonathan and I agreed at an early stage that EMO the Musical is a commercially-leaning film that talks to a wide young audience. For it to succeed we need to secure suburban exhibitors and this is going to be challenging because Bonsai Films is a boutique distributor. So Jonathan and I are currently looking for partners who will help us broaden our reach. We would absolutely love the film to go off theatrically. We are also taking a long tail approach by focussing in on SVOD (subscription video on demand) and other home entertainment platforms as we know most millennials will watch it on computer screens.

“I understand why theatrical distribution is the measuring stick for the PO: there is a certain validation and reinforcement that comes with a commercial entity believing that a film has the potential to release theatrically. I also know how hard it is to get the bigger distributors to commit. There is also an argument that a range of stories for a range of audiences needs to be told to ensure that our diverse Australian culture continues to live on the big screen.

“Because we went through the grant door Screen Australia had some flexibility around market attachment, particularly regarding an international sales agent. Following discussions I didn’t contract with a sales agent because the advance wasn’t high enough. This gave me a unique opportunity to be able to go to the international market with a finished film using Australia’s 37º South: Breakthru Screenings which are part of the 37º South Market. There were 35 sales agents and distributors at the screening and we were very well received. We are now negotiating with a handful of sales agents as a direct result and hope to make that announcement pretty soon.”