Do Not Use Debt Instruments To Finance Your Movie - John Paul Rice

so if you are driving out to Riverside I

don't know if you're working a full day

and then you're having to get in your

car but that hands-on approach versus

this thing I keep throwing out which is

the red carpet producer and I know I'm

making light of it but I remember when

he told it to me years ago and I never

forgot it totally and I wonder if you

could just explain yeah he was what what

it is well so there was a very my former

mentor who told me that there were a lot

of producers out there that want to have

their name in a film you know and they

want to walk the red carpet with a

starlet and you know it's kind of more

it's a more sort of status thing as

opposed to the the producer that will be

married to that project for the rest of

their life and gave me some examples of

that so the red carpet producer I mean

is the one that you know it's it's the

glamor life it's the it's the one where

you know you're you're sort of just

there is a figure that you were a part

of this yes but you were just sort of

there to cash in on the on the

experience of it as opposed to the

filmmaking process and that's not every

producer but there are a ton of them out

there they you know they'll help make a

movie and they'll put their name in the

credits and and they really just want

the kind of the social benefits of all

of that to kind of play and do their

thing I don't know if that is that

answer that it does I was thinking if

someone though comes with a checkbook

and I know this sounds very assertive

callous but and they you know that

that's their very defined role and they

are like yes I have the money I just

want to invest in this then I feel like

they get a pass but not everybody comes

with that I realized right and there are

a lot of red carpet you insert any title

yeah there's a lot of people in there

they just want to you know say they made

a movie and and that's fine you know but

it's it's it's not producing I don't

think there there are line producers who

are amazing people and there are

creative producers that are amazing for

you and there are executive producers

that are amazing people but if you just

show up with it I mean obviously if

somebody came to me with money and said

hey we want to invest but I'd really it

really had to be though that we have

shared shared principles sort of in the

sense that like Who I am as a person I

don't want to just be taking somebody's

money not knowing who they are not

knowing I mean I wouldn't get involved I

wouldn't start a business with you right

unless you and I Karen kind of like

talked through some things and kind of

go oh yeah we feel kind of the same way

about this world and sure you're

bringing X and I'm bringing Y to this to

this vision that we're gonna create and

do something but if somebody's just

showing up handing money and you just

don't you know it looks like mmm and

they're flipping about it yeah sounds

good yeah yeah yeah oh it's a great idea

you know keep me posted keep me posted I

mean I I've met so many of those people

that like they'd literally walk around

and actually the the thing that kicked

off when our fantasy girl was I now

believed that that's what we had we had

a person like that I've even offered

money before like lots of money through

debt instruments you'll hear about that

that term a lot and and it can get

really tricky because ultimately the the

loan that you're taking out to finance

your movie it's on you to repay Oh God

and it's know so it's not it's not

really financing in terms of venture

capital which is risk it's I'm gonna get

paid whether this movie makes money or

not and it'll be off of your back and

your name is on the loan it's not the

person providing the financing we've

we've looked at all the paperwork and

there are there are many different

instruments out there they're there you

know that are backed by banks and in

reality for an independent film producer

this is this is one of the dangers I

don't think there's been many people

that have done this but when you're a

big studio and you have a whole slate of

movies and you can afford to lose money

in some

where others will make up for the the

losses of the other you can play that

game when you're talking about one movie

and five million dollars and five

million dollars being in your name and

you're responsible for paying that back

within a certain number of years

irregardless of how the film turns out

irregardless if a distributor buys your

movie up only to hold it I mean there's

all sorts of things that can go wrong

that prevent you from getting that and

though that money back so it's best to

work with people who share your vision

who believe that you're capable of

implementing this goal this dream this

thing you have not just on a business

plan but when they sit across from you

and they're asking you questions like a

smart investor would who's cautious

where they're gonna put their money that

they're not just out there ready to sign

up and you know let's make your movie

but yet at the same time there isn't

this other process that it goes through

its kind of back to that validation when

you're a young actor out here and

somebody say hey you got a good look hop

in the car you know but it's the same

it's the same thought process you you

you if you're investing money into a

film you want to know who you're getting

involved with on both sides of that

table because in at the end of the day

if everything goes wrong you don't want

to be countersued or you don't want to

sue you don't want to countersue you'd

rather go hey we tried we're gonna you

know it didn't work you know this is it

was all written out obviously you do the

contracts and everything else and

everybody knows what what the investor

and the credited investor is and all

that kind of stuff

but at the end of the day you don't want

to have troubles when things don't go

right you want to be able to you know go

hey we all got in this together we have

the best intentions working together

we're people and we you know I need you

you need me if this is what we want to

do to make money or tell this story or

both hopefully and and if it doesn't go

the way we think it is then we have to

learn from it and move on that's what

investors that's what good investors do

the good investors are

people who have made bad investments and

they've learned from making those bad

investments what not to do the next time

around makes them a little bit more

cautious maybe a little bit more cynical

but the only thing that you have at that

point is just yourself and what you're

bringing to the table and if that person

sees you as a values to what they're

trying to achieve and go yeah you you

reflect all of the qualities that I'm

looking for in people that I know in

other industries who invest in products

and materials and businesses you share

the same qualities that these

entrepreneurs do and and those are the

kind of relationships that I want to go

forward with and I've been very blessed

to have those I learned a lot of lessons

early on red carpet producer ready to

write that check keep me posted you know

and and nothing is on the record ever

you you will know like they can never

put anything in writing for you

everything will be a phone call let's

have a conversation yeah let's talk

about it a phone calls no good and

especially as you get closer to meeting

their their their stated demands or not

demands but objectives that they need to

have in place in order for that

investment to happen what a lot of these

guys do is they as they get people like

you and me around and they will they'll

get a retainer from somebody they get a

monthly retainer to pitch projects so if

you've got somebody who's willing to get

involved with you and you are getting a

retainer from a group that's looking to

do the financing the whether it be the

bank or the banker or somebody else what

they're doing is they're basically

presenting you a slate of projects and

the status reports every month and

saying here's where we're moving on this

as if this date will have this and if

projects come and go and drop off well

then these people are getting that money

to vet them saying well they you know

whatever reason they make up to this

individual and meanwhile they could be

telling you everything is going fine and

yeah yeah we've seen that a couple of

times it's a it's a con and it's a scam

but the the real con is the one that

they're doing and they're getting the

retainer for the the the worst one is

when the filmmaker commits

and has done so through a process really

where there's no verified paper trail if

anything that's been said or and yeah

it's bad it's bad I I tell pretty people

if you can't put something in writing

with anybody yeah

don't get involved with them that's a

red flag

you