Mastering Film Finance: Louise Levison's Crash Course on Successful Movie Investments

[00:00:00] Entertainment. Insight. Don't take life too serious. Welcome to Brainsky Unleashed.

[00:00:03] Today's guest has a fantastic grasp on the finances of movies. Not only does she have a…

[00:00:09] Today's guest has an amazing grasp on understanding the finances and the business of movies. She not

[00:00:16] only understands it, but she's also taught it at the universities in California, and she's also been

[00:00:21] consulting for many years. What is she most famous for though? Well, she writes business plans. And one

[00:00:26] of the business plans that she wrote was for a movie from back in the… And if you were around back then,

[00:00:31] you would have known very well what the Blair Witch Project was. And if you were into horror movies,

[00:00:36] back then, this movie was it. More recently, she's even managed to find her way to be on the screen

[00:00:42] on the independent film Movie Money Confidential, directed by Rick Pamplin, one of my previous guests.

[00:00:48] So happy to have with us today, Louise Levison. All right, so joining us today is Louise Levison.

[00:00:54] And I'm so happy to have you on the program. Louise, as I mentioned in the intro,

[00:01:01] you had a heck of an involvement here with the Blair Witch Project, a very famous film. You've even

[00:01:08] been quoted as being not just the person who did the business plan for the Blair Witch Project,

[00:01:14] but you were also known sort of as the architect. What does that mean?

[00:01:18] I wasn't the architect. Well, I think what they might be referring to as… There wasn't a script.

[00:01:26] That's what I was referring to there. Yeah. Okay. Yeah. Because I mean, I didn't create it or think of

[00:01:32] the plots and all that. There wasn't a script. They gave me kind of an outline of what they planned to

[00:01:39] do. And the same thing was with the actors. They never had a script. They were told every day each

[00:01:45] one was given a little slip of paper and said… They purposely hired improvisational actors out of New

[00:01:51] York. And every day, each person got a slip of paper. This is… You're going to talk about this

[00:01:57] subject or you're going to do whatever. So, you know, I put it together looking like a synopsis as much as I

[00:02:04] could. Oh, really. So, as the one who did the business plan… Yeah.

[00:02:09] You didn't have… There was no script. Yeah. They had a formal script just kind of an outline,

[00:02:14] which I don't recommend, but that's the way it went. Well, because they didn't want them saying

[00:02:19] pre-written words. And if you remember… Did you see… You saw the film? Yeah. Yeah. I mean,

[00:02:24] many, many years ago. So, do you remember when they woke up and the guy was gone? Yeah.

[00:02:29] He got a little slip of paper saying, wait till everybody else is asleep and come out and join us.

[00:02:35] Because they were in a very small chorus and the people filming were on the edge of the forest.

[00:02:40] So, when the people woke up, they really didn't know where he was.

[00:02:44] That's… That's how… That's how… That's how…

[00:02:46] That's incredible. So… Yeah.

[00:02:49] All right. I'm going to pivot a little bit. That in itself is fascinating. The fact that this was

[00:02:55] literally produced with almost… Was it entirely improv or just… I mean, it sounds like it was

[00:03:00] entirely… The whole… The whole thing was improv. I mean, the points that… What they wanted to

[00:03:05] happen in each scene, there was like a… Yeah. I guess like a sentence, you know, that kind of thing. But,

[00:03:11] you know, you're going to talk about this, you're going to talk about that. You get up and lead,

[00:03:16] you know, that sort of thing. But basically, they… Also, right at the beginning of the film,

[00:03:21] if you remember, they interviewed something like five or six people on the street. Right.

[00:03:26] I think three were actors and three weren't… The people who were the best were the people who

[00:03:30] weren't actors. That's amazing. They were asked this question and they just came up…

[00:03:34] I mean, there was a woman with a baby and she just came up with this wonderful… She was the best

[00:03:38] person. That's incredible. But the… The directors were very good. They were experienced and they

[00:03:46] made it work. So, yeah, I really give them the credit for that. Hearing that now and looking back,

[00:03:51] I mean, that's just amazing is what was produced. I mean, from the business planner standpoint,

[00:03:58] you're handed this project and… First of all, do you even know why they chose you instead of

[00:04:03] anybody else? Like what was this… Yes, because I knew their attorney. Okay.

[00:04:06] So it was just relationship. I was already working with their attorney. Yeah.

[00:04:09] Totally relationship. At least they're out there, these young kids and, you know…

[00:04:12] So they drop this thing on you and you look at it. What are your first impressions when you're

[00:04:16] looking? There's no… My first impression is there aren't any other

[00:04:19] mockumentaries. That was my biggest… Interesting. There was one Robert Einer did in

[00:04:24] 1982 that actually went theatrical. There were other mockumentaries, but they weren't theatrical. So

[00:04:30] I think the biggest problem because you have to have comparative films in order to do a forecast

[00:04:36] was what am I going to do? So I… What I did was I made a list, one list of things close to being like

[00:04:44] found where… You know, whatever and found shade, whatever, and things that look like mockumentaries or had been,

[00:04:52] but either may have had a little bit of box office, but had no real thing that I could forecast off a show

[00:04:58] which ones were mockumentaries. Then I did a list of horror films that were… Over three years, I did… I only

[00:05:06] used 15 films, you know, five films a year or two-year-old films that have gone worldwide. And so I used… At

[00:05:15] that time, there were a lot more really low-budget films, like, you know, between 500,000 and 3 million,

[00:05:21] that kind of stuff. So there were enough, like, films averaging around $2 million for me to do a

[00:05:26] forecast. So I did the forecast after the horror film. And that's pointing to the investors. The

[00:05:30] biggest thing in business plan is you have to tell the investor what you did. You have to be honest

[00:05:35] with the investor as long as investors understand and, you know, they say, well, I like the theory or

[00:05:41] I don't like the theory. Okay. So you're looking at this and you're struggling at basically to come up

[00:05:47] with something because they're so to work with. I mean, they basically gave you a cocktail napkin.

[00:05:51] Yeah.

[00:05:52] Yeah.

[00:05:52] So this prod, the Blair Witch Project was essentially coming to fruition off of a cocktail napkin.

[00:05:59] Yeah.

[00:05:59] And then you take it and I guess that's where… Because like I said, you know, when I opened

[00:06:04] it up, just talking about the architect, you know, I'd heard that quote from actually Moving Money

[00:06:09] Confidential, one of your… And so that's what that really means is you took it from cocktail

[00:06:14] napkin to something that could be a functional film.

[00:06:19] Right. And I mean, and then the thing is explaining like the target markets and things like that. So

[00:06:24] a lot of it is in the writing. The thing with business plans is, and I'll say this is why I

[00:06:31] don't particularly care for text. But anyway, with a business plan, everything, everything that's

[00:06:37] text has to be factual. To explain a forecast is, you know, the data is factual, but the forecast itself

[00:06:43] isn't. But everything in the text has to be factual. So I, you know, I just looked at

[00:06:49] everything that was in it so I could say who's going to go see it. And it was an interesting

[00:06:54] thing. I won't say it was because he's no longer with us, but on the way out after the first screening,

[00:07:01] one of the distributors who was at that time really big in the new, you know, independent world

[00:07:08] people said to me, who's going to go see this bill? And I said, the Motion Picture Association,

[00:07:14] when they do ages, they have like 12 to 17. I'd refer to this as my 15 year olds. I said,

[00:07:21] 15 year olds, I think you have one in your house. He's going to go see it. And then he's going to go

[00:07:26] see it. And the other thing that I, that I based the forecast on was people were going to go see it.

[00:07:33] And then they were going to say to their, their friends, because we didn't have a lot. We didn't

[00:07:37] have all this social media stuff. People couldn't necessarily get to see things run away and streaming

[00:07:43] and all that. Then they would go with their friend and see if their friends got scared. That was the

[00:07:48] main thing. And that's what built though. Cause why would, why would a film like that have,

[00:07:52] I don't know, $140 million, I think was, was the domestic box office, which is the US and Canada.

[00:07:58] And that was because people like multiple times. Older people would say to me, you know,

[00:08:03] I saw it and I didn't really like it. I said, well, thank you for your $9. That was the thing.

[00:08:11] That was really one word of mouth. Now when I write a business plan, I call it word of tests,

[00:08:15] but that's one word of mouth was really important. That makes a lot of sense. And I mean, I, I, I love,

[00:08:21] I love your gusto with, with the guy coming out of the movie theater. I mean, talk about confidence.

[00:08:25] I mean, I don't know who this guy is. He probably, you know, it pretty, you know,

[00:08:30] was probably a big shot or whatever. I mean, your, your confidence with that is just priceless. Like,

[00:08:33] Oh, you got a kid, a 15. They're going to see it. Yeah. And level it.

[00:08:37] Well, um, I have to say, I have to say also, I came in at a time when it's still, you know,

[00:08:43] particularly in finance. I don't know now they want to like him anymore, but I've been told I was wrong

[00:08:49] ever since I've been in the business. Yeah.

[00:08:51] I don't know. I think I was just born stubborn. I have worked in, uh, before I got into film,

[00:08:57] I had, uh, worked with, uh, entrepreneurs in startup businesses for about 15 years. So

[00:09:04] that's where that spirit comes from. Yeah. Yeah. I find a lot of, uh, fairly successful people,

[00:09:09] myself included, have been told, been wrong a lot. Right. And, um, I always look at that as a gift,

[00:09:14] you know, it's that, okay, you want to push me fine. I'll show you.

[00:09:18] Well, you know, we had all these, uh, for movie money confidential, we had all these great things,

[00:09:24] uh, on Rotten Tomatoes, you know, by critics. And they said a lot of nice things about me. And then

[00:09:29] somebody wrote, uh, every news thing that woman has no idea what she's talking about. She doesn't

[00:09:35] even know how much the movie made. And then he quoted the box office.

[00:09:43] Yeah. I never, I never, I never get into conversations like that. You know, it's not

[00:09:48] worth debating at that point, you know? Yeah. Yeah. Haters gonna hate. Yeah. Um, so as you're,

[00:09:54] as you're working through the business plan, first of all, your initial take was you gotta be kidding

[00:09:59] me. Uh, and, and, and as you're working through it, I mean, did you ever have a sensation that this

[00:10:06] mockumentary was actually going to be something? Yeah. You did. But yeah, I actually did. I mean,

[00:10:12] I believe that. Why? Um, I'm just talking to, um, the people who are gonna make it. I was working

[00:10:19] with, uh, they fortunately had brought in some people. One of the producers had had his own

[00:10:25] small companies that he's the one I was working with, but just, I like, I like the idea. I like the story.

[00:10:31] Uh, I thought it could really work. And it was, it was a small film, but different. And the,

[00:10:38] the, the strange thing is, I think it was Scream that had come in about two years before. Believe

[00:10:43] it or not, they had, horror had kind of been out of favor, which I can't even believe for a few

[00:10:49] years at that point. But I just, I just felt that my, my whole feeling was if, you know, uh,

[00:10:55] if they really believed that the whole, again, I believe if they believed it was a true story,

[00:11:00] it was, I really did believe that then that wouldn't lose money.

[00:11:03] No, that makes sense. Um, and, and maybe you're right. Maybe part of it was just, um,

[00:11:09] a combination of, uh, what, what they believed was possible, what you're reading and seeing,

[00:11:14] working with them and getting confidence in them and damn good timing.

[00:11:18] Yeah. I mean, man, you know, you, you never know if the audience is gonna decide.

[00:11:22] Yeah. So I, I'm curious, um, just, just, just on the planning side, what did you plan for it to

[00:11:30] actually cost and what did it actually cost? Oh, no, they planned for it to cost 300,000,

[00:11:36] 300,000, but there was a little bit more money in post. So I think it was 350 was the final.

[00:11:42] So the, the final cost to actually produce the film was 350,000. So it was only 50, so it was only 50,000

[00:11:49] off from your original. Well, I didn't do the budget. Okay. All right.

[00:11:54] I don't do budgets. I just took their budget. Okay.

[00:11:57] But I love it. You know, I'm late then until this point, no matter what I said in the book,

[00:12:02] people had, um, and someone who people went to for Biden, uh, um, people had the budget down to 25,000.

[00:12:10] The last number I saw was 10,000. So all of that is complete crap then.

[00:12:15] Yeah. I mean, I thought you're supposed to believe everything you read on the internet.

[00:12:20] Well, that was a comment. All right. So, so we have, we have 50,000 above what was planned,

[00:12:25] business plans executed. Now we move to, to actual, right? So the movie is made.

[00:12:30] Mm-hmm . What did it finally, what did it, you know, well, we know, we know it cost 350.

[00:12:36] What did it finally make when it was all said and done?

[00:12:38] Well, the revenue I think was, uh, sure. A million or what?

[00:12:42] 50 million dollars.

[00:12:42] I said, I, I, you know, I do three projections. So one is break even. I did, I had clients say,

[00:12:50] well, aren't you going to put in films that lost money?

[00:12:53] Sure. How much did you want?

[00:12:54] I see.

[00:12:55] Which we tend to be successful.

[00:12:59] So what was break even? Then you have a moderate, which is what I figure might make.

[00:13:04] And then I do a high. So the high in it was that I put in was 50 million. And, uh, one of the, uh,

[00:13:12] people from the distribution company, one of the, the others, then I saw a quote from him saying,

[00:13:19] this film can make $50 million. What? Holy genius. So.

[00:13:23] Yeah. But apparently a gift to all. Yeah.

[00:13:26] Yeah.

[00:13:28] I mean, what a gift, right? Yeah. Yeah. No, I mean, for me, I will say, you know,

[00:13:33] I just got paid to do a business plan, but for me, it has been a gift.

[00:13:37] Oh yeah, no doubt. I mean, that's, that's a tremendous, um, tremendous ROI for, for any

[00:13:42] of the investors that have been on it. Yeah.

[00:13:45] I mean, I don't know what the buy-ins were or anything, but are, are, are all 100% of the

[00:13:51] investors millionaires from that film or, or, or just high, at least some of them.

[00:13:55] I don't remember what they are. Right.

[00:13:58] I think a point the attorney told me, I think a point was valued. Now they only made money off of,

[00:14:05] I think domestic. Okay.

[00:14:08] So I think a point was worth slightly less than 900,000.

[00:14:12] And still not, not a bad ROI.

[00:14:15] They had a lot of investors and you know, the usual way you would sell things that,

[00:14:19] you know, five or 10 or whatever. I'm not sure. I don't know. Cause somewhere it's either five

[00:14:23] or 10 for a point.

[00:14:25] Something like that. I mean, no matter how you look at it, some people bought in a few points.

[00:14:29] Yeah.

[00:14:29] And I mean, they're doing well.

[00:14:32] And they have to bring someone in at the end to cover the overage. Cause when you go back to

[00:14:37] investors and say, I want more money than you should go now. Sometimes they will, but,

[00:14:41] and I have seen, I have, you know, I know so many stories, uh, just from people that I know where,

[00:14:47] um, their films ended up in the drawer because the original investors said, well, no,

[00:14:52] I'm not gonna worry. And even though the phone wouldn't get, wouldn't go anywhere unless they

[00:14:58] did. How often does that happen?

[00:14:59] I don't know.

[00:15:00] Yeah.

[00:15:00] Yeah.

[00:15:00] But yeah, you're dealing with, oh, I mean, I, I dealt with a lot of people who are first

[00:15:05] sign filmmakers and a lot of people who are experienced, although sometimes first sign filmmakers

[00:15:10] are better, but you know, it's, um, it happens. You have to be really, you know,

[00:15:15] you have to be really careful about when you're doing bunches and things like that. And particularly

[00:15:20] now that we haven't said, I found that even the experienced line producers will take the incentive

[00:15:25] out of what has to be raised. And you can't do that because the incentive doesn't get paid

[00:15:31] until after the film's made. And then the state steep has to go through it and agree to pay that amount.

[00:15:38] So, uh, okay. Um, I guess my question, uh, or my next question is, is more from sort of a,

[00:15:46] a personal standpoint. Um, I've been talking with, uh, Scott DuPont and of course I interviewed, uh,

[00:15:53] Rick Pamplin and my eyes are opening to the possibility that maybe, maybe I'll give investing

[00:15:58] in into, you know, film project a shot. Um, I mean, let's be honest, you know, 401ks,

[00:16:02] my IRAs, I mean, you know, anything that's, it's running conventional market, not doing so hot.

[00:16:07] Um, but how viable of an option is investing in movies? I mean, is this something that's even

[00:16:13] recommended? I mean, you've, you've been around a long time. What are your thoughts?

[00:16:16] Nobody would ever reckon gamble. It's always been the gamble. But on the other hand,

[00:16:22] now that hopefully the pandemic was problem, but recession, sometimes are very helpful

[00:16:29] because people with a lot of money will pull, this happened in 2008, 2009, will pull their money

[00:16:37] out of the market. And if you go and say, and that they do want to do something. So it's,

[00:16:41] it's a Vegas gamble. You just say, Hey, I'm selling us for $10,000 a price. They'll go,

[00:16:46] Oh, Hey, I'll take a ride on it. Something like that. I actually had for a while,

[00:16:50] I was getting consulting money during that time, uh, kind of giving some lessons to, uh,

[00:16:58] attorneys who wanted to get their investors into build business because the York Times said it was a

[00:17:04] good offense. Oh my gosh. Yet another reason you probably don't want to trust the New York Times.

[00:17:10] Yeah. I mean, you kept, it's, it's like, you know, of course buying stock, as we know,

[00:17:15] certainly for recent things and not necessarily good idea either. So I'm just thinking, well,

[00:17:21] and you just have to, you have to go on what information you're given, how you feel about it.

[00:17:27] Um, you know, if people are involved, I've been, um, moving money confidential was probably the

[00:17:34] eighth business brand of rating for Rick. Um, so like, is there a way to, to kind of gauge as,

[00:17:40] as a, as a new investor or, or someone who's even remotely interested in possibly doing this?

[00:17:44] Is there something to like gauge what may be a safer bet, but well, knowing full well,

[00:17:48] it could all be lost. I mean, first of all, I recommend that anybody who wants to make an

[00:17:54] investment, having to terminate his financial business. Okay. Um, you know, it's, um, you have,

[00:18:00] you have to look at, you have to be able to look at the information you're given and see how,

[00:18:05] see how credible it is. If people say, will say in a business plan, I can't say, uh, this,

[00:18:12] I could say this would be, uh, a great, great part for Tom Hanks, but Tom Hanks never heard of me.

[00:18:19] That's right. People, people do that and they go, Oh, right. And then when you find out that

[00:18:24] they're the only, you sue me. Yeah. The other thing strange about, about investors is they

[00:18:29] sue poor people. It gets so mad. Wow. Yeah. Cause that'll get you something.

[00:18:35] And, um, one thing I did, I tried to put in the book cause it was really important. The first

[00:18:40] class I, I saw it online for, um, UCLA as an, as an extra thing. So one of the first classes,

[00:18:46] uh, well, before I taught online, I was teaching live cause online didn't, you know,

[00:18:51] I was teaching live every other quarter, each other class. And so one of the first classes I taught,

[00:18:56] I said, um, the fellow said, he didn't want to say he was going to make, um,

[00:19:03] a film about climate and that kind of stuff. So he said he was going to make it. He was going to make

[00:19:08] a thriller. I said, well, you can't say that, um, because then they'll be mad because they put

[00:19:15] their money in film businesses reaction. Wow. But I'm also trying to describe it. Yeah.

[00:19:20] So, you know, it works both ways, but that's, that's begging for a lawsuit.

[00:19:24] So I have seen that, you know, you just have to be the people asking for the money and the

[00:19:30] people giving the money have to be equally careful. Yeah. I mean, I guess with something

[00:19:34] like that, that's almost equivalent to, um, telling your financial advisor, listen, I'm going to,

[00:19:39] you know, or issue broker really, uh, here's, here's X amount of dollars. I want you to buy

[00:19:44] stock and, and, um, uh, and then the broker goes back a week later and goes, listen, I,

[00:19:50] I executed a trade and, uh, I bought stock in a Walmart. That's not good. Well, at this point,

[00:19:55] probably a better bet. Yeah. It could be, could be. Um, we'll see where that goes.

[00:20:01] Um, well, I had, I had the same, I had the same problems. I was fortunate enough to get a little

[00:20:07] bit of side, you know, I draw a father and yeah, I had the same problem. Now what it was,

[00:20:12] and who do I believe? Right. Yeah. You know, you gotta be able to trust who you're working with

[00:20:16] and trust as much as possible who you're putting your money into. Yeah. Yeah. And, uh, so it,

[00:20:21] it's hard. Um, that's why, you know, you have to be careful. The idea that you have somebody

[00:20:28] who really does know the business to get you with. And like in a business, when they first,

[00:20:34] um, started with incentives, the attorneys would go, well, you put it in. Well, why should I put

[00:20:40] it in? You know, I'm not, that's illegal. So, uh, so what I started doing was describing it,

[00:20:46] you know, in the paragraph, basically in the basic facts of what it is. And then the last line is

[00:20:51] to consult your attorney and see how this affects you. Okay. So I'm gonna, I'm gonna kind of dig into

[00:20:56] the weeds just a little bit because I know my, uh, I have got a very eclectic listener base. Um,

[00:21:03] can you explain what you mean by incentives? Incentives is when, uh, the state says that, uh,

[00:21:09] they have an incentive, uh, that, that based on certain facts, they are willing to give you, um,

[00:21:18] some money after the film's made. Okay. But when they say that and they say you're accepted,

[00:21:22] accepted means you're unaccepted to be part of the pool and you're only accepting it until

[00:21:28] they see what we're actually made. Um, all right. So we're, we're interested. We want to invest in a

[00:21:35] movie. There's a business plan as an investor. You're probably going to want to see the business

[00:21:39] plan, right? Right. What should they be looking for that would give them an indication like,

[00:21:45] all right, this looks good. Like what, what looks good in a business plan for someone who goes,

[00:21:51] yeah, I want to invest. Yeah. I could say, yeah, my book is it. Honestly. It's a good plan. Hey,

[00:21:56] plug the book. Go ahead. Hey, don't wait. I'm asking business plans for any time. I really,

[00:22:02] you know, I was surprised I bought a year from more investors. Um, basically what I found, um,

[00:22:08] is to, there's an executive summary, read that first and see if it makes sense and see if it's

[00:22:14] something you want to invest in. Um, and then when I come in with a lot of investors, if I'm really lucky,

[00:22:20] they'll, they'll read the executive summary and then they'll read them. They'll go look at the,

[00:22:24] at the dollars and see, you know, or have their CPA usually look at the dollars and see if those

[00:22:30] make sense. Otherwise I have to keep them reading through the entire business plan. Um, but, but

[00:22:35] if I can, you know, it's, um, it describes what the film is. It should have a synopsis. It gives you

[00:22:42] beginning, middle and end, and always the ending. You're an investor. They're not trying to get,

[00:22:48] you'll read in the theater anyway, maybe. But, um, and of course the budget, you know, um,

[00:22:53] after that now, and because I was just talking to people I was talking to earlier are making

[00:22:59] something based on a non-franchise and they have people who acted in the original films who would

[00:23:05] be in their film. So something like that, of course, it's really important if you know who's in the film.

[00:23:11] But, uh, the problem you have is that it has, it should, it should say, it should indicate that

[00:23:18] they know they're supposed to be in the film. Okay. Um, I don't know how should I say it. I'll just

[00:23:24] say they're right. If I know that they've given a pro-Lupino film, I try to indicate somehow what it

[00:23:30] is. Um, the other thing is, uh, what are the target markets? Who's going to go see this film? And,

[00:23:35] um, and then the, um, the money based on the, you know, that, that explains the genres and that sort

[00:23:43] of thing. And basically what the drama is being compared to, you're not going to find, um, like

[00:23:49] when I was, I have done obviously a lot of horror films and, um, the conversation I was having

[00:23:54] earlier, uh, there were two films that are just straight down the line or, and then there was a lovely

[00:24:00] film, but, but every film has other things. Most films have other things in it.

[00:24:05] They're going to be good. They'll, they'll be, I don't know what, you know, they'll have crime,

[00:24:11] prison, or they'll have romance, or even they're a comedy lord. So that kind of thing, just see

[00:24:18] what's, see what's involved in it. And basically if you like the film, yeah, they're investors who

[00:24:24] are invested in some kinds of films because the film is making a point that they like. Okay.

[00:24:29] That's another reason to invest in the film. Right. So then, I mean, because you're so familiar with

[00:24:34] business plans and I'm sure yours are all locked tight and excellent, but

[00:24:41] As long as they get a proofreader.

[00:24:43] Amen. I can't even sign a card to my mother without getting my, uh,

[00:24:46] card debt.

[00:24:47] My personal way to knowledge, my handwriting really is not very good. So my mother said,

[00:24:53] it's not me. Thanks. Could you just sign it and then tag the rest? That is a note.

[00:24:57] Yeah. I have to do that. It's that bad. Um, so you know, that, I guess that's, that's a,

[00:25:03] a good answer coming from a place of, you know, it's a solid business plan. There's things in it

[00:25:08] and it's, it's clean. What would you, I mean, what, what's typically a good example of a garbage

[00:25:13] business plan that someone should look at and go red flags galore, run away?

[00:25:17] Well, one thing that I've seen a lot is they tell you what the box office is,

[00:25:23] was there some films they want to compare and then they deal with forecasts. They don't have data

[00:25:28] branching else, but then somehow are forecasting. And I've seen this a lot. They somehow are forecasting,

[00:25:34] you know, now they would, what we call home entertainment, which is coming back. You know,

[00:25:40] streaming is hard to forecast because there's not data for streaming, but there's downloading,

[00:25:44] which Netflix also still does. There's kinds of things. So if they just have the US box office,

[00:25:50] or North America, I used to say, cause that's Canada. They just have a North American box office,

[00:25:56] and then they're forecasting what the film's going to do without any of the data supporting

[00:26:00] what they're saying in their forecast. Then that's, that's definitely a sign.

[00:26:05] Right. Big red flag, right?

[00:26:07] Yeah. I mean, it's, it's hard to know. And because you know, if, when they put in the data,

[00:26:13] you have to assume it's correct. I mean, I'm not sure, you know, unless again, most people will have

[00:26:19] their CTA look at the data to see if it makes sense. And having an attorney who is at least

[00:26:24] who's still looking at stuff. Yeah. Yeah. And there's more things, but those are unbentical.

[00:26:30] It's more like how people try to get you to put up the money and, you know, because when you're doing

[00:26:36] something, doing these kinds of plans where you had multiple investors, none of the money can be used

[00:26:42] by the filmmaker until all the money has been collected. And so, although you have to be really

[00:26:48] careful, if that's something in the attorney will look at that they're not trying to get money,

[00:26:54] you know, that hasn't really hasn't been put in Espera.

[00:26:58] Yeah. Would that be considered like maybe one of the, one of the top three red flags to you?

[00:27:03] Yeah. What would, what would be like two other like top red flags?

[00:27:08] I would really say, um, if they're, if they're promising people to be in it that,

[00:27:15] you know, no, how, you know, if, if it's somebody, you know, like Rick, Rick Lenzunas would say,

[00:27:20] Rick said someone was going to be in a trial. But, you know, he's very, he knows,

[00:27:24] got a drink. But newbie filmmakers, well, how do we know this person? You know,

[00:27:29] you might want to question, you know, did they have any kind of agreement, that sort of thing.

[00:27:33] Okay. So, so would it, would state that there would be an agreement in there?

[00:27:36] You know, I don't know that they would, but these, these days people don't, you know,

[00:27:41] when, when things are always, remember the old days, you'd do things in print. Sometimes that would be

[00:27:45] in the, you know, in the back, but yeah.

[00:27:47] That's so 2010. Yeah.

[00:27:49] I know. That's great.

[00:27:52] Yeah.

[00:27:52] Um, so that might, you know, that might, you might wonder, well, again, how, how's Tom Hanks

[00:27:58] going to do this too many dollars? Now there are people particularly, um, things

[00:28:03] are coming down now, but I went to Sundance. I've been to Sundance 28 times. And I saw,

[00:28:08] I did see a lot of well-known people in very small films because there are actors or actresses who

[00:28:14] kind of can typecast. They may be like a list, but they can typecast in certain parts. And then

[00:28:20] somebody has this great part for them and this little film and they will take it.

[00:28:24] Okay. So that's not uncommon.

[00:28:27] No, it's, it's not uncommon, but you still, you know, you might wonder and ask, I would ask about

[00:28:33] that.

[00:28:34] Okay. You're right.

[00:28:35] And one of the things, um, that was really for filmmakers to know, everybody who, everybody

[00:28:43] who participates in something like, um, you know, industrial occurring where you have multiple people,

[00:28:48] everybody has to get the same information as everybody else. So if you know that, that's

[00:28:54] what I tell people. First of all, I, I tell my clients, do not send them the whole budget because

[00:28:59] then you're going to have people who don't know what they're doing, looking at the budget,

[00:29:02] and question, well, why did it cost that much to get shoes?

[00:29:05] Yeah. So, uh, but you want to find out, you know, lots of times, I mean, certainly it still happens.

[00:29:11] And she, and one of the ways I used to, I used to say that, um, finding investors in a way was like

[00:29:17] going to the library, get one investor and he'll recommend another investor. So lots of times

[00:29:22] the investors want to know each other. And so you want to make sure, you know, somebody else,

[00:29:27] somebody says, I got this or that or whatever that you got to send that. But, um, it's, you know,

[00:29:32] it's, it's really hard to, um, I just, anything that doesn't make sense would be important.

[00:29:38] Yeah. Something that just kind of stands out.

[00:29:41] And, and, uh, no, I break my own rules because sometimes I have to be jingling now, but, um,

[00:29:47] if they're comparing their, I use studio films, but your studio films are the same price,

[00:29:53] budget price range. So there are studio films that, uh, you know, don't cost 800 million.

[00:29:59] So you're taking, you're, you're including those in comps, even though they're,

[00:30:01] they're slightly different animals.

[00:30:03] Well, yeah, we are. Yeah. Because let's say, um, smile or was made for, well, smile was made for,

[00:30:10] I think 17, but, um, there's, I have a bunch of, I had my list of just the, um,

[00:30:16] the current ones I can use, uh, that are in the box, the box office from 2020 to now,

[00:30:22] which is, I just use box office and budget because that's all I've always used the last years. Um,

[00:30:29] so, um, that's a studio film, but it's still made depending on your film within a reasonable budget range.

[00:30:37] So they'll have films that are 12 million, 10 million. Uh, and, um, but if it's a,

[00:30:43] if it's a $3 million budget and they're using something that was made for 60 million, you know,

[00:30:49] actually they shouldn't be anyway, because the way the numbers work, if they were doing it,

[00:30:53] the way I do it, you get a better, you get a better forecast out of a smaller film with a large,

[00:30:59] but with a higher box office. Okay. Which I mean, that makes sense. Just even on the air.

[00:31:03] Yeah. Okay. Well, that's going to lead me then to, to another question, which is, you know,

[00:31:11] is there a general number or percentage as far as an average ROI? Uh, you know, when we look at, um,

[00:31:21] when we look at like stocks or mutual funds or whatever, I mean, you can, you can group things

[00:31:25] and go, Oh, you know, this is the, uh, the, the average ROI over a 10 year span, or there isn't

[00:31:30] anything like that in films. Is there? I, well, and I never used the term ROI because

[00:31:34] technically ROI is a, is an accounting term that involves other things or haven't been just, you

[00:31:40] know, dividing the box office by the budget. So when, when filmmakers use an ROI, it's not really

[00:31:47] usually a correct statement. So it's not in my business plans. Okay. But I mean, take, take the

[00:31:53] term out. Is there, I don't, I don't, you know, I don't think so. Okay. I don't know. You know, um,

[00:32:01] again, what makes sense is if like they said, I did the three, I did the three forecast. What

[00:32:07] should make sense is what I say the moderate or conservative thing is, as opposed to if I had

[00:32:15] said the Blair wish was going to make $50 million, it was only forecast or something like that.

[00:32:22] Okay. Then at that time, you know, it should, people should not look. And the selling the revenue,

[00:32:28] but the Blair wish also benefits for the fact that their Prince and Nance were very low.

[00:32:33] You know, that, you know, other horror films that were made shortly after that,

[00:32:37] I don't know, they had higher. Higher cost.

[00:32:39] PMAs, fortunately for me. Um, so, I mean, you may have already done this,

[00:32:43] but is, is there anything else that you could think of that would be like, you know, really good

[00:32:46] first time investor advice? I mean, I, I definitely know that, you know, it's,

[00:32:50] if you're going to do it, get a lawyer, get an account to look at it. Is there anything else that

[00:32:53] you can think of for like a first time investor in a movie that you could be like, Hey, you know,

[00:32:57] there, there's a lot of, you know, there's a lot of, uh, there's a lot of, uh, there's a lot of good,

[00:33:00] but also a lot of not so good when it comes to this type of investing. Anything else that you

[00:33:05] could think of? If you have a deck, don't read it. What really? Well, yeah. Again, um,

[00:33:10] they're, they're not done with any kind of, um, they, they, they will say things I wouldn't put

[00:33:17] in a business like, um, like who's going to be on it, that kind of thing. Um, I did,

[00:33:22] I don't say what it is because if Dawn went out there way back, I did a film and, um, the, uh,

[00:33:29] producers that I was originally working with, um, claimed that so-and-so and so-and-so

[00:33:34] was going to be the film. And I said, I'm not putting it out in the business right,

[00:33:37] because you have nothing from this team. Well, it's how I feel more than fun. You have nothing

[00:33:41] in writing. You can't prove you ever, they ever heard of you. Um, and, uh, fortunately, just by

[00:33:47] chance, I happened to be working for the person who put up the development money was the person

[00:33:52] paying me, not them. So I still got to finish. Um, and so like they put in IMDb with these people

[00:34:00] were rumored. Eventually another producer came in and some of those people actually ended up being.

[00:34:05] And so, okay. So out of luck. Yeah. So yeah, there, I mean, I definitely would,

[00:34:14] you know, I guess I would definitely question one of these that, you know, if it doesn't make sense,

[00:34:19] what is, you know, if you wonder why this person would be doing this film, it's, it's a, it's a viable

[00:34:25] question you ask. And, and so, uh, read the business plan, avoid the decks. Right. Okay.

[00:34:29] They, they just, because it's not in their minds. They're just putting in whatever they kind of

[00:34:35] want to put in. And I know I was really lucky when I first started there. There are two,

[00:34:40] in terms of PGMs, there are two attorneys I work with mostly when, when I have a choice

[00:34:45] that we're on working with. Yeah. I can get my clients and use them. And one of them would be,

[00:34:49] uh, like he liked reading my business plans and he would like say, okay, don't say expect,

[00:34:56] say, say we expect this to happen, say in 10. It's yeah. Well, it's, um, it's, uh, you know,

[00:35:04] it's one of those, uh, you know, should or shall type things, you know? Yeah. Yeah. But, but,

[00:35:09] you know, it, there is no, there is no real way to know that that's the problem. Yeah. It's,

[00:35:15] um, it's very much, uh, I mean, you know, it's like you said at the outset, it's still a big risk.

[00:35:20] And, and, you know, I, I agree with you. I don't know of any financial advisor that would go,

[00:35:24] hey, you know what? Here's a really great idea. Invest in movies.

[00:35:28] It's not made that. Now only,

[00:35:32] no, I mean, I guess they were just into my clientage, you know,

[00:35:35] hey, get them into recession, see if you can get some of those dollars while we're,

[00:35:39] you know, and we're talking about people who have a lot of money, you know? And then it's like,

[00:35:44] gee, I'd like to put my money into something. Oh, you only want 10,000. I spend more than that here.

[00:35:49] So, so that's, it's like, it's like going to Vegas for you.

[00:35:52] Yeah. That's, that's an important point actually is, um, you know, if you don't have

[00:35:56] the money that you can comfortably throw away, this is not the young. Yeah. Yeah. Yeah. Okay.

[00:36:04] Yeah. That's actually, you know, pretty insightful. And I've, I've heard that before. Um, the more

[00:36:08] that I look into it, the more that I can, you know, really see that that is a very true statement,

[00:36:13] uh, you know, because you don't want to put money into something that, you know, as you mentioned,

[00:36:17] ends up in a drawer somewhere. Well, and nobody knows they, you know, um,

[00:36:23] I'm sorry. I said that once nobody, nobody knows anything. And I can think that all these

[00:36:29] people are going to like the bill or all these people back out of the bill. It's funny because

[00:36:33] people, because of where rich people say, what have you done lingering? Well, I ran a business plan

[00:36:38] and people paid me for it. I didn't make the phone. Yeah. I didn't go out looking for the investor.

[00:36:43] I didn't pick the distributors. I had some films that I really liked. My clients did a really great

[00:36:50] job. They had the investors and, uh, their choice of distributor wasn't very good.

[00:36:55] But at the end of the day, you know, you're, you're, you're, you're much more towards the

[00:36:59] beginning of a project, obviously than, than the, that's what I always thought of a strange that,

[00:37:06] you know, um, other people in the business would say, you know, well, she doesn't know what

[00:37:11] she's talking about because I'm helping the filmmaker make a project for all these other

[00:37:17] people to, to distribute it or be an attorney for or all those kinds of things. So I think they should

[00:37:23] like it. You're at the beginning of the process though, you know, you're way, way in the beginning.

[00:37:27] Yeah. Have you ever had, uh, you know, situations, uh, in, in your career where,

[00:37:32] because I mean, overall you've had a pretty successful career, at least, you know, uh, from,

[00:37:36] from what you can, you know, say on your LinkedIn or, you know, and talking with you obviously. And,

[00:37:41] and, uh, have you ever had times where you just, your career just crapped the bed and,

[00:37:46] and, and struggled or has it been a really steady?

[00:37:49] Oh, sure. I'm working with poor people.

[00:37:50] Oh, okay. That says a lot.

[00:37:52] Well, all of the time I'm working with poor people.

[00:37:54] Okay.

[00:37:54] So if you know, it's, um, and I really did, you know, pandemic is very hard.

[00:38:00] There was, you know, it was like, one of the things they rush out to, you know,

[00:38:04] was get a paper business plan, whatever. Um, so that's really the downside in a way. Um,

[00:38:11] you know, and a lot of other people who are, you know, independent consultants and that kind

[00:38:15] of thing, I worked for myself and, um, sometimes some years are good and some years aren't.

[00:38:21] But you're still in business.

[00:38:22] I'm still working with.

[00:38:23] So no matter how bad it got, you were able to kind of persevere and get through?

[00:38:27] Yeah. Well, one of the things, I don't know if you watch football.

[00:38:31] I do.

[00:38:32] So, cause I'm a Bengals fan.

[00:38:34] That's an odd team to be a fan of.

[00:38:37] A lot of Cincinnati.

[00:38:38] Okay. Then there's a, there's a valid excuse there.

[00:38:41] I'll give you a line.

[00:38:41] Well, I don't know if you saw the 90 yard run.

[00:38:45] I didn't actually, I heard about it.

[00:38:46] I haven't seen it.

[00:38:47] Well, I just, I like it.

[00:38:49] I keep crying yet.

[00:38:50] Cause he said, I can't even get there.

[00:38:51] I'm going to get there no matter what.

[00:38:53] Yeah.

[00:38:53] This is, this is, this is what you really have to think about.

[00:38:57] Yeah.

[00:38:57] I was watching him try to end one of these down.

[00:39:01] Ravens almost got him.

[00:39:03] Almost had one of him down until one of his teammates pushed it off.

[00:39:07] Yeah. So I'm a Ravens fan and is one of the most painful teams to be a fan of.

[00:39:12] You know, every, every, you know, decade or so you get a really good streak and there's

[00:39:19] a super bowl and you get excited.

[00:39:20] And that's about the end of the excitement there.

[00:39:22] Cause it just goes up on you so fast.

[00:39:24] Well, I have to admit that I actually went to college.

[00:39:29] You can tell you never went back before there was a Bengals, but my father had what they

[00:39:35] call box seats, not a closing thing, but you know, just a section.

[00:39:39] Um, and we went to see the Cincinnati Reds.

[00:39:42] I think the first time I went, maybe I was six years old and you know, my brother and I

[00:39:46] would go every summer, all this kind of stuff.

[00:39:48] So, um, you know, died in the world, you know, Reds fans though, I had to be a Bengals fan too.

[00:39:55] Deeply ingrained.

[00:39:57] Um, if, uh, if people wanted to find you, how would they connect with you?

[00:40:01] Uh, thank you.

[00:40:02] Well, I'm on, I'm on Twitter and Facebook.

[00:40:06] Um,

[00:40:06] Hey, your website.

[00:40:08] My, uh, my website is murkymoney.com.

[00:40:11] I thought it was very nice of Rick to land the money after my, the name of Phil Merckley,

[00:40:15] my website.

[00:40:16] So it's murkymoney.com and, uh, it's Louise L at earthlink.net.

[00:40:22] All right.

[00:40:22] All right, Louise.

[00:40:23] Thank you so much.

[00:40:24] Um, are there any other projects, uh, that you're working on now that people should know

[00:40:27] about or should kind of keep an eye out?

[00:40:29] Well, I can't say anything about that.

[00:40:30] That's a good thing.

[00:40:31] Everything you do is confidential.

[00:40:32] Yeah.

[00:40:33] Yeah.

[00:40:34] Yeah.

[00:40:34] You know, until it's not at which point then you could look back and say, Hey, by the

[00:40:37] way, look, apparently I did do this.

[00:40:39] Yeah.

[00:40:39] I did.

[00:40:40] Yeah.

[00:40:40] Yeah.

[00:40:41] All right.

[00:40:41] Yeah.

[00:40:41] So either the way, I mean, the nice thing about streaming is there are films that,

[00:40:47] too, I will say one other thing.

[00:40:49] Although I've done a lot of horror films, I've done an equal amount of faith-based films.

[00:40:53] I started working with some faith-based, uh, distributing this over.

[00:40:57] Yeah.

[00:40:57] But, um, I, I have films that are streaming that never were in the box office.

[00:41:03] So it adds to my, my bio really because people go, Oh, look at you.

[00:41:08] I'm kind of glad you, you brought that up before we, uh, before we, uh, you know, and the

[00:41:13] podcast here, it's the faith.

[00:41:14] Are you seeing an uptick in these?

[00:41:16] Uh, you know, I know that with the, uh, with the program that chosen, uh, it's been wildly

[00:41:20] successful. Um, is, is there a better market for this now than there was before?

[00:41:24] I don't know. According to the Nielsen's, uh, there are fewer Christians than there were before.

[00:41:29] So I'm not sure how that, how that works.

[00:41:32] It's hard to tell, um, um, the market got, what people don't realize is the market really grew

[00:41:39] as, as I was coming up in the business when I couldn't, in my book, I, I really couldn't

[00:41:45] use the term faith-based because distributors didn't like it.

[00:41:48] Uh, I think until my fourth edition and then Sony picked up a film and distributed it and

[00:41:54] created a firm, which was the division in their company that all of a sudden, the base was okay.

[00:42:00] Um, and so, you know, right now in the theater, I have, as new as I have, you know, four films

[00:42:07] had been about the independent budget over the day.

[00:42:11] I like to turn inspirational better anyway, because there are a lot of films that have

[00:42:15] the same kind of quality and his redemption or whatever that maybe not wouldn't be classified.

[00:42:22] Yeah. They don't necessarily tie it.

[00:42:23] Yeah.

[00:42:24] It's hard to, it's hard to tell because, um, there's really, you know, streaming is so big.

[00:42:31] You can't get a feeling for that.

[00:42:32] Yeah. So far, um, some things are, there are some things that have come out.

[00:42:37] Um, now one of them from other countries that have come through our docs law office,

[00:42:41] but, um, I think it's starting, I think it's starting to pick up more. It's mostly a matter.

[00:42:46] I can say that I went to see my first film in a theater, uh, this weekend, this past week.

[00:42:52] First film in a theater?

[00:42:54] Since, uh, the pandemic started.

[00:42:56] Because I'm older and I'm type 2, but I'm kind of all the kind of stuff.

[00:43:00] Are, are you going to tell us what it was?

[00:43:02] Oh, Fable.

[00:43:03] Okay. Very good.

[00:43:04] I didn't see it in every kind of film. I felt guilty.

[00:43:06] But my nephew was visiting and I said, what do you want to see? Then the family was,

[00:43:10] do you want to see it? Because I'm not a fan of the big. The other thing is that theater that's

[00:43:17] near me hasn't had most of the films I've ever watched. There are films that are out,

[00:43:21] but they haven't, they'd been mostly had the big.

[00:43:25] Big name films.

[00:43:25] Monster of Spain was on that I don't really care that much about.

[00:43:28] Top Gun Maverick was fabulous. I'm just saying.

[00:43:30] I'm just getting that out there. It was really good.

[00:43:32] Well, I mean, you know, what I like to see and whatever I do this is funny, it's for two

[00:43:37] different things.

[00:43:37] Two different things. Yeah.

[00:43:38] Yeah.

[00:43:38] But I, I really do like independent films. Um, for the most part, I don't know what a

[00:43:43] famous one this was about, but, um, because they're, they're so cremated a lot and different

[00:43:47] and that sort of thing. And sometimes that works and sometimes that doesn't.

[00:43:51] But it keeps it interesting.

[00:43:52] Yeah.

[00:43:53] Yeah. It's not as repetitive as, you know, as much as, as much as Hollywood, you know,

[00:43:57] is, is, uh, creative per se, it seems like we get a lot of repetition.

[00:44:01] Right. You know, rebranding repetition and you know, it's the same movie over and over

[00:44:05] again with just different things.

[00:44:08] Right. Right.

[00:44:09] All right. Uh, do you have any, uh, final thoughts or sage advice that you want to share

[00:44:12] with anyone that's listening?

[00:44:13] Well, basically film hackers are listening. I was, I would say, you know, be careful how

[00:44:18] you approach it because they never have a business plan or find someone who can do a good business

[00:44:22] plan. All right.

[00:44:24] All right.

[00:44:24] I mean, it's really important because investors care and have a really good attorney who's familiar

[00:44:29] with film.

[00:44:29] I was probably, I've even said it usually, I'm not really rich. You know, I'll tell people,

[00:44:35] but you don't have a, I said, first spend your money on the attorney. If you have to choose

[00:44:38] between me and the attorney, go like forever, you need to be an attorney.

[00:44:42] That's solid advice in any business situation or any business transaction. My, my cousin who's an

[00:44:47] attorney, very successful attorney. He gave me that advice years ago when I was going through some

[00:44:51] legal BS. And I mean, it's, it served me well because every other rounded legal BS I've hit since

[00:44:56] that point, I'm sure that I, you know, it's like, uh, you know, you, you want to make sure that

[00:45:00] regardless of the fact that it's going to cost you more than a cheap attorney,

[00:45:06] you want the, you basically want a litigator with really sharp teeth watching out for you.

[00:45:10] Well, just look at what their experience is. And there, there was some junior, junior, uh,

[00:45:15] in a big firm, then you have a problem. And I've had, I've had that a lot with somebody,

[00:45:20] yeah, somebody, somebody's father, you know, he takes it to his law firm,

[00:45:25] it's big company. And then they have some junior will say, well, this should be in the business plan.

[00:45:30] I'll say, okay, you send me an email and I'll put it in a business plan. Exactly. As you started,

[00:45:36] we can name it's hatched. And I never hear from them again.

[00:45:39] There's that confidence. I like that. I like the way your book ended the confidence. That's

[00:45:42] excellent. All right. Well, thank you so much for, for joining me and coming on my podcast. I really

[00:45:48] appreciate it. Oh, I enjoy it. I've been watching, you know, you on, on LinkedIn ever since we connected.

[00:45:54] And I thought, man, it would just be so fun to be able to talk to you and kind of pick your brains a little.

[00:45:58] Yeah. So I, I've really enjoyed it.

[00:46:02] I mean, you know, all things can, all things can be forgiven. Again, thank you so much.

[00:46:09] Okay. It's been great. Thank you. You bet.