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Secret Bank Loans

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Contents: Ebook
Author: Dewey Oates
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Studio And Independent Producers

Individual independent producers could be more or less involved in the realization of a film than studio producers and studio executives. David O. Selznick (1902-1965), one of the industry's major independent producers and best remembered for his blockbuster adaptation of Gone with the Wind (1939), led several independent companies (Selznick International, Selznick Picture Corporation, Vanguard Films Production). He financed his own films with bank loans and the proceeds from company stock, which he sold to himself, his family, and wealthy friends. He owned his own studio facilities. He placed major stars, directors, and technical crew members under contract to himself. But he also hired

Irving Thalberg b Brooklyn New York May d September

The distributors could actually advance funds or guarantee bank loans for particular films. The effect of these arrangements was that Selznick's independent filmmaking made him closely bound to the major distributors. For Gone with the Wind, for example, Selznick gained some production financing for what was the most was not financially independent. His production companies always relied heavily on bank loans and distributor advances and contracts from major studios, which meant his productions were subject to the oversight of the banks and distribution companies. Yet, Wanger was still considered an independent producer in the studio era, one who, like Selznick, had worked as both a production executive and a studio producer beforehand, and he produced several controversial political films (The President Vanishes, 1934 Blockade, 1938 and Foreign Correspondent, 1940) that major studios and other independents would not have backed. The differences among Goldwyn, Selznick, and Wanger...

The United Artists Revival

Before moving to United Artists, Arhtur Krim and Robert Benjamin managed Eagle-Lion Films, the American-British company that had taken over low-end independent PRC. At Eagle-Lion, Krim and Benjamin initiated a hybrid brand of independent production whereby their company would provide film producers with 'a patchwork of financing consisting of second money, studio credits and completion bonds to supplement conventional bank loans.'31 Although the company had some success and managed to attract a small number of top-rank independent producers (Walter Wanger, Brian Foy and Edward Small), financial problems - but mainly Robert R. Young's (the company's owner) interference in Eagle-Lion's decision-making - forced Krim to resign in May 1949 and seek other opportunities in the film industry.

Independent Production The United Artists

In terms of budget, United Artists would lend the agreed funds to Lomitas Productions or, alternatively, would guarantee bank loans to the production company. The distributor would be also responsible for pre-production advances (cost of literary properties costs of writing the screenplays other usual pre-production costs), would provide a weekly salary to Kramer for administering the productions for the duration of the contract, and would guarantee completion money (funds allocated to the production company if the film runs over-budget). In other words, United Artists would be the complete financier of Lomitas Productions, from pre-production to completion, but once the agreement (with all the distributor's approvals) took place, the producer would be in effect free to make the type of picture he or she wanted without any form of interference from the investor distributor.

Business Of Codependents

After Orion established the modern incarnation of the satellite production company with Warner in the late 1970s, one by one the rest of the majors gradually adopted this practice. Such deals generally involved a contract between producer and distributor whereby the latter provided the former with office space in the studio lot, staffing and development funds so that the producer could develop films which the distributor could option. Once a film was greenlit for production, the distributor would then provide the producer with the budget (or guarantee the bank loans) or, as has been the case more recently, ask the producer to secure part or all of the negative costs from outside sources in exchange for distribution in all media.

Identity Crisis

The independents needed the studios to raise finance (because of their tangible assets the studios were in a position to guarantee bank loans) and to distribute their films worldwide (an absolute necessity for films to break even after the drop in domestic attendances). In their turn, the studios needed the independents to provide them with the necessary product (at a time when they had started firing their personnel and reducing their production schedules) and to cut overhead costs by making independent production companies take up slack space on their backlots. Before the end of the 1940s then, studios and independents had already become strong allies. For that reason, when the Paramount Decree gave independent producers the opportunity to compete with the studios on an equal basis, not only were the independents in no position to take up the challenge but, had they taken it up, they would have had to go against the hand that fed them, the institutions that allowed them to exist.