R. Ellis Frazier, Director, Producer, CEO at BADHOUSE Studios: The face of it is a million
dollars meaning your collateral I'll give you $800,000. Some people would say I'll give you
$500,000. Others will say I really like it I want you to make it a little bit bigger
I'll give you 1.2 million.
Film Courage: How does the money come together for one of your projects?
Frazier: In a couple different ways normally someone will send the script out and then and just
we have a network of sales agents and distributors and as long as we have an actor on the film that
they like and that they can sell they'll give us a minimum guarantee and and then we have places that
we can go take that minimum guarantee and and cash flow it depending on who that comes from
we can get between 80 and 120 of the face of the minimum guarantee thing about filming in
Mexico what happens normally I'll back up just a little bit is that you'll normally that mgm out
will not be enough that's why people go to the rebate states because then they can go get about
another 30 percent or so which will complete their budget maybe they have a little bit of cash or
an investor an equity investor generally speaking we can keep our budgets low enough to to to work
just with what we have with the minimum guarantee which is why we're kind of unique in that way
what they give us with the minimum guarantee we make the movie with that whether it's the
80 or 120 percent sometimes there's a little bit of money in there with gap money
but generally that's the way it works and sometimes you just have people that just have
money and they come down and want to make a movie and then but but we like to that's the rich uncle
program isn't really one to build your career on in my opinion you wanna you wanna have the
right connections and the know-how to speak the language of those distributors and financiers
we have this person this package we have these people we're going to film it here
here's the budget here's the schedule and then we've done it a million times
and then they say okay cool they give you the paper and once the paper is collateralized there's
a lot of people that will give you money for it's like if you go to we're selling paper cups and we
get a order from Walmart for a hundred thousand paper cups someone will give you the money to make
those cubs the key is you have to make sure that it's the right price and how to make the cups and
things like that but once you step once you get the the purchase order from Walmart's any a lot
of people give you the money to make make it as long as how to make it so it's kind of like that
you said previously we all need to know about the sort of the law of supply and demand yes so
is there like a crash course you could you could teach and well yeah that's I tell I tell that to
a lot of people actors especially because actors sometimes will say hey I'm worth this much money
and I want this much money I'll say well I love to pay that money but we're all subject to the laws
of supply and demand and if I go to Germany, Japan and Italy and I say I have joe blow in my movie
I'll whatever they tell me I'll give you half of it chances are going to tell me I'm not going to
give you any more money for him or her and so I have to sell the film so I understand your
services or your services but I can't pay you premiums that I can't recoup this is the laws
of supply and demand and oops and we'd love to make our art and our wonderful films that we
have in our minds that we have thought about and dreamed about making but at the end of the day
we have to supply what is in demand and and that's the difference in my opinion
of working a lot and working a little and it will be maybe
in the end of it it'll be that wow you should have just made two great films and not 20 cool films
maybe that's what maybe that would be if there was a alternate universe but the path that we've taken
is one that looks at what is in demand and helps to figure out a way to supply that demand so that
so that the so that the train keeps moving down the tracks
the the enemy of the process is is to not be moving you have to keep moving
even if it's risky even if every project and let me tell you every project is not a good project
of the 28 29 projects we've done everyone has not gone great there's been and and there's
no one else to blame but us or me and some and those can be hard to come back from sometimes
but you don't do 28 films and have them all be perfect it's just not going to happen
the key is keep moving you keep adding value you keep making sure that the what you provide
in the end gets finished and is put out into the market it's success level you really can't
help or or say too much about it has a lot of different factors but make sure
that the quality stays very consistent and and you'll keep people keep coming back to you to
to figure it out and figure out a way to get their films done so so we we follow the demand
and follow that up with trying to figure out a way to keep the supply
as close to what we want as possible but we're still following the same under the same laws
of supply and demand what is the market for your movies and how do they end up making money well
we the lowest the kind of medium to low budget action movies the market used to be kind of
with the AFM markets American Film Market market used to be straight to video streaming now it's
mostly streaming when we create the films we we don't make these films right now to be projected
one of the reasons is because some of the best films now are not projected
they're streamed and so most of it's streaming it's coming off of the old school
video model which is a point of sale model perusing blockbuster and
that looks interesting let me grab it now you're on streaming platforms and so you look for
Amazon Netflix we have Netflix films we have Amazon films Hulu
Tubi our films are everywhere and and so
it still comes from the old system though which is the [Jean-Claude] Van Damme, [Steven] Seagal
world of action films which is it's formulaic a little bit the thing is that we do
with mice films specifically is I add this artistic tinge to them
if you look at the reels and stuff you'll see it I try to do beautiful beautiful framing center
framing things that are to make the to make it look a little bit bigger a little bit more
beautiful a little bit more composed and not just shoot them up action and knock them down action
so I do a lot of beautiful composition and then I get a lot of really really good performances
out of the actors and but at the end of the day they kind of go into the same
streaming platforms Amazon Netflix Hulu things like that and that's okay I think that's
where things are at now so I don't think much is getting projected these days I mean a lot
sometimes but I don't see films under 50 60 million dollars getting projected that much
and if so it's a no it's an anomaly and your distributor is approaching
these outlets to be Hulu things like that not not you personally no no the distributor does that
when we hand it off to the distributor they they send it out among the world but usually they have
because like I said before about collateralization usually it's collateralized in one way or the
other they already have these people interested and and they're waiting for it a lot of times
and and so as long as the film screens good has a good trailer and is filmed as is written or
close to it then it goes out on the platforms and these platforms are subscription based so it's not
I mean they're going to get that subscription whether they like my movie or not they're still
going to get their ten dollars a month so they need content and and so the content and choice
that's what people want you can't have look the page and look at the Netflix page and there's
four movies on there they want choice all the films aren't going to have the same quality but
they're they have good relationships the distributors and sales agents have good
relationships with these platforms and they get it out there and it's always nice to see
them on there can you explain what you mean by collateralized well collateralized meaning the
money has to come through collateralization process which will be that
the distributor sales agent will have to have sold or at least have interested let's call it Netflix
or amazon in that movie to let's say a million dollars or whatever or 500 000 and then the
other 500 000 they can sell in foreign sales you have to have a piece of paper that they can take
to a financial institution that says I'm going to sell 500 000 to this one and I've already talked
to them and they see this and see that they've seen they know the director they know Frazier's
directing they know what the subject matter is they know that this actor is going to be in it
if it has those elements it has a beginning middle and end we'll buy it at this amount so
they can take all that the aggregate of all that money that number and that creates the collateral
and so then you take that package collateral package to financier and the financiers
will look at it and say I'll say okay the face of it is a million dollars meaning your collateral
I'll give you 800 000. some people would say I'll give you 500 000. others will say
I really like it I want you to make a little bit bigger I'll give you 1.2 million so it
depends on who you go to but everything has to be collateralized by something if you're going to do
it in the traditional finance like I said if you have the rich uncle then they'll just take their
chance or whatever if you can do it crowdfunding or something like that but everything but if you
but the the more stable environment to build a career on is to be able to collateralize your
projects and your packages so that you can take them out and get them financed and you
can figure out okay I can if I have this element that element element that element
this product is collateralized and now I can just take it out to several funding sources
and figure out who wants to do it and with these funding sources where is a filmmaker looking for
how to get in contact with these individuals I mean it sounds like a lot of these people they
work with existing it's not like they just have a website where people can just contact them well
my experience has been that that your distributor knows who will quote bank their paper so when they
say okay I'm gonna I your film's worth this much they already have a district a financier
that knows them they've already paid back several times and so they already kind of have
an open deal they say okay so if they come there with the Frazier film that's a million dollars
worth of sales or potential sales or whatever I'll give 80 of that they already know
where to go with that but there's also in kind of a network of indie producers that we all
kind of use the same people a lot of money comes out of the uk you can just look it up
and find people but you're always best whoever is giving you collateral
should know who's going to fund their collateral that's how their collateral is valuable
if somebody says if I go to you and say hey I'm going to give you clowns I'm going to give you
a piece of paper and say your film's worth a million dollars people are going to say
who is this guy where what is he sold what other collateral does he have
is he cross-collateralizing this with other films blah blah blah so so most so if you
a question for filmmakers to ask producers is to ask if you go to somebody and somebody gives you a
minimum guarantee and you sign your film to do it with them they give you a minute guarantee it and
whatever the amount is first thing you ask them is who's who do will bank your paper because if your
paper your paper has to be bankable so you can get it from somebody that no one will bank the paper
and then you've tied up your movie for a year so you ask them up front who banks your paper they'll
say well you can go to Citibank you can go to this funding guy you can go to this private equity fund
and they fund that and they funded our last four films so we can go you send it out and people send
you a term sheet and they they they bid for it the funding companies bid for your to fund the film
so first and foremost you were consumer of action films before you started making them so you knew
the audience is that right yeah a little bit I mean I i like I said before I kind of got turned
into an action director because that's where we are and that's what the people distributors wanted
I tend to to have more my personal films I like tend to be more epic and deep my favorite films
are like apocalypse now which has a lot of action but it's also incredibly story driven godfather
movies like anything by David Fincher they have great action in them but they're more story driven
and I think that where I'd like to end up would be there action films are great but
you know in the big action films there's a whole separate unit doing that
that's doing all that big stunts and stuff and sometimes they do it completely independently and
the director worries about the story and make sure the story ties into everything
so I'd like to do a film with no action frankly that'd be that would be my because I've done
so many with the action and cartels and shooting everybody up I like to do one
that just had just a story just a compelling interesting story that something like a sling
blade was just a good story and something that means something and maybe inspires and people can
learn something from it and feel good about it and be part of their artistic experience
so but but then I can't I don't want to down action movies I mean they've done a lot for me
and I've built a career on it so far and I like doing those too I would just would it's a balance
and so I do but but in those in the films we do there's we sneak that story in we sneak it in so
that it's there so that so that that's what keeps that train moving and that that trajectory towards
more exactly what I want I don't want to just capitulate to doing action all the time I want
to want to create that story in there and the in the framing and the cinematography and all
that stuff so that it's a little bit more than just the average action film I hope.