Tuesday, November 3, 2009

The Proposal

A proposal for developing a sustainable system of film financing in North Carolina (‘film’ meaning moving picture and sound content of any format, for distribution by any means.)

Author: Steven C. Fox

Date: December 10th 2008


The growth of film production as an industry in North Carolina has long been at an impasse. We have not yet arrived at the point where we are consistently producing, developing and funding our own projects. In order to sustain itself into the future, in order to reap the greatest economic benefits, and in order to have its own voice in the world, North Carolina film production must undertake the work of building the institutions which will allow us to negotiate this impasse.

We did once have a measure of the autonomy we are now seeking to regain. When Dino DeLaurentiis originally founded his studio in Wilmington, now Screen Gems Studios, it operated much the same as the traditional Hollywood studio system. In the studio model of filmmaking the studio handles the production, development and financing. Mr. DeLaurentiis had been a very successful producer in Europe and was able to secure financing for his projects and produce them at a near constant pace. With the sale of the studio, first to Carolco, then to Screen Gems, it was no longer the point of origin for the films that were shot there and therefore no longer an essential link in the chain of production. The studio became a rental facility attempting to attract production from elsewhere and thus became subject to the ebb and flow of the market.

In filmmaking, each production is an independent company. These production companies are usually formed and based in Los Angeles or New York. They select a location to shoot their film based on the demands of the script and of course financial considerations. As the company moves toward the shooting phase of production a crew is hired. The crew members are essentially independent contractors. The most skilled and highly paid of the crew will most often be hired in the city of origin of that particular company. Because the production companies are based in their cities of origin, not the shooting location, when filming ceases little or no institutional infrastructure remains in the shooting local. The most skilled workers naturally gravitate to the cities which form the institutional base and the greatest economic benefits are to those communities.

If we in North Carolina ever hope to enjoy the full economic benefits of this valuable industry, then we must again become a consistent point of origin for production.

Although film production is an expensive and risky undertaking, it is an alluring business and investors want to get involved. Unfortunately, with the substantial odds against the success of any single production, in most instances the investors are left unrewarded and disinterested in any future involvement. Successful film production is a complicated and enigmatic procedure. The keys to any success in this field are skilled producers. To attract competent producers with viable projects, we must make production financing available on a scale befitting production needs. To attract investment on the scale necessary to meet production needs we must provide investors with a transparent, sustainable and well managed investment vehicle. In order to minimize the risk and offer the greatest hope for a return on investment we need to create an investment pool large enough to develop multiple projects simultaneously so that the risk to the investor is spread over numerous projects.


The problem we confront is from what existing entity does such an institution arise? We have long hoped that something would be spawned out of the private sector that would convey us to a place of greater prominence within the industry. Part of the problem is that few institutions operating within the industry locally have the scope to create an investment vehicle of this scale. Other likely candidates are simply not interested in pursuing this aspect of the business. So, as the greatest benefits will come to us as community, it falls to us as a community to seize upon the opportunity.


The State, and by extension the University system, has the resources to take on a project of this magnitude. It is the accepted role of the State to take the lead in regional economic development. As Erskine Bowles stated in his inaugural address as President of The University of North Carolina system, Greensboro, North Carolina, April 12, 2006:

In partnership with business, government, and other sectors of education, this University must seek out ways to help every region of North Carolina foster and stimulate economic development. In this regard we must better align our curriculum with the changing needs of business and emerging industries. We must find better ways to share and apply the technologies developed on our campuses, and we must supply the expertise communities need to adapt to this global economy.

In addition to its many resources and the expertise of its faculty, the University system brings with it a vast network of connections within business and investment communities. These connections, along with the credibility the University system brings to our effort will, in the end, greatly enhance our ability to attract investment on an appropriate scale and vastly improves our likelihood of success.


Here specifically is the role that we propose for the North Carolina University System:

1) Conduct a study of the varying types of film funding institutions existing today with a special emphasis on identifying those that have proven successful both financially and artistically.
2) Report to a committee selected for guiding the process so that this committee may make a determination as to the type of institution we wish to develop.
3) Oversee the process of creating the legal structure of the proposed institution based on preexisting institutions as models.
4) Assist in the selection of a board of directors who will in turn begin the selection of key management positions.
5) Develop a marketing strategy by which this institution will begin the process of seeking investors.

In Conclusion

North Carolina fell serendipitously into the film business with the unlikely arrival of Dino DeLaurentiis to our state. In the ensuing years a legion of North Carolinians learned their craft and became skilled film workers. In recent years the value of this clean well paying industry has drawn the attention of many states who have tried to attract the business with tax incentives. They have been successful to some degree but good fortune and Dino DeLaurentiis left us with some natural advantages. We have equipment, a highly functional studio in Screen Gems, a skilled crew base and diverse geography.
We are uniquely poised historically and geographically to assume a substantial position in the production world. With its unique history and character The South has made great contributions to American literature. We owe it to ourselves and to future generations of North Carolinians to begin the work of forming the institutions which will assure that our voice will continue to be heard into the future.

When commenting please include your name and your usual position in production if you don't mind. But if you're not comfortable with that please feel free to comment anyway.


  1. If I'm not mistaken when the NC Film Commission was first established it allowed for funding grants for North Carolinians to finance locally produced films. I wonder what happened to it?

    When Dino came here he did so because of the lack of union labor gummin up the works. Today the local union has established itself as a force that both hinders and helps our film making community. Face it film makers are just like any other HUGE corporation, it's about money and if they can get stuff for less elsewhere then that's where they will go. Twenty years ago they came here, then they went to Canada, now they are in Michigan and Lousiana, 5-10 years from now they will be in Mexico.

    The way I see it the only way for all of us in the film community to survive is to do our own thing. There are many, many talented and well connected people here with a ability to make that happen. Sitting around and waiting for government or Johnny Griffin to feed us is a waste of time and a great waste of our money. Let Bill Vassar figure out how to bring Screen Gems business, let them fund the marketing efforts of the studio, stop funding the Wilmington Film Commission to act as their agent, use the moeny instead to help local people produce films by encouraging local financing, tax incentives for local workers to work on the films, tax incentives for those investing, incentives for rental companies, and incentives for equipment houses.

    There is a huge financial risk associated with financing movies, I've been asking around since the Angel Doll days, how do I find money. Why invest in a high risk venture with low expectations for a return, an "artist's" temperment when you can buy/leverage real estate. Of course that seems to have changed, but you'd be surprised. Those with money will soon be buying up everything they can, you know that Steve. A ten million dollar piece of property yesterday will still be worth ten million or more down the road and you can buy it this afternoon for 5 million. Put $100,000 into a movie and all you got in the end is a DVD. There is no local market for $100,000 DVD's as there is $100,000 pieces of property, land, sticks, bricks as long as I-40 keeps dumping those old northerners into our area.

    I like the idea. It just needs an objective look.

  2. I appreciate your time and energy in your proposal. I do agree with the comment on your proposal--there has to be an upside for an investor to invest in film. Tax incentives for the film industry including for those investing in film production are important tools to help generate production in this state. I recently relocated to NC from Los Angeles with my business, Corlin Productions. I did so with a belief that the NC film and video production community will continue to grow. I strongly supported SB 943. My comments on the bill will be included in the Charlotte Chamber of Commerce upcoming issue of Ventures Magazine. With a spotlight on NC film production, generated by NC public support including support of our elected officials, and our universities (as included in your proposal), there is a promise for NC to generate sustainable success. Thank you for the information and for the opportunity to review your proposal. Linda Ann Watt, Owner, Corlin Productions, LLC

  3. I agree with your foundation - NC needs to develop a home grown film business.

    However, your proposal goes completely off-track at that point, unfortunately, because while it's true that studios make movies, that is ironically not their critical role. It's the studios that fund and control the distribution of films to exhibitors.

    Your system would at best result in an "indie" production company with zero power to distribute films and thus earn any money.

    Filmmaking as art and as as business is best understood backwards.

    To create a viable local film economy you have to start at the distribution end and work backwards, not at the "making a film" and go forwards.

    It still could be possible the that university system could help or undertake this task, but the mission would have to change 180 degrees to look at where the money to fund films really comes from - distribution.

  4. You're absolutely right. I actually couldn't agree with you more. I thought about retooling this proposal to reflect what I thought was a more appropriate distribution of assets into other distribution avenues of for production, like commercials, instructional videos, television, commercial applications, and web content of all stripes. I think movies are what people can relate to as a production model and my aim was to keep it simple.

    I don't know how to crack the distribution nut for film. That's another battle to be fought.

    1. Hi Steve,

      Has anything happened on this? Has UNCW done anything to further this?

      I think that in its inception Cinema 6 might have been a good idea, but as you say, it would take a lot of funding. Is anything happening there?

      Do have a second iteration of this? I would love to see it posted here?

      David Peters

  5. I agree that the proposal needs some work,but I think it's awesome that you're searching for the solution to an obvious problem. As one of many aspiring feature film writers/producers/directors who wants to keep their crew in Wilmington & is desperately searching for funding, this is an exciting first step. Great job Steve! Keep working on it!

  6. Filmmaking is high risk when you do it one project at a time. With diversity of productions it's a lot more stable. Putting money into one picture that has to be make or break is a ridiculous risk, it's putting all your eggs in one basket. We need something that can fund ten or twelve features and take the hits when half of them fail at the boxoffice.

  7. Steve,

    The fact that you are seriously looking at the issue of film funding is commendable. There have been several investor groups of one kind or another who have been approached about the idea of funding a pool of investors. The conversation seems to stop when investors discover that distributors end up with the first money out. So, it might be a good idea to look at both issues at the same time. (One idea could be to form a "local" distribution or way to air the films produced for "investor ratings" thus forming a way to create small amounts of money to get information for distributors based on a local audience reaction ... a cable channel might work for this purpose. Or, an internet site could serve this purpose. Of course, to do this, the film would need to be fully or partially made.)

    Several people have successfully raised money in NC ... a few have actually paid their investors a little money. Some have actually made their film. And even fewer have shown their work.

    The unique thing about the film industry is that one film may appeal to one group of people and not at all to another so when raising money it is not enough to say that you plan to have several different films. They may need to be of the same genre.

    I'm not sure that the University system is the best place to house a private venture...however, if you were to hand this off to the graduate school in some form of business simulation, you may be able to work out the kinks.

    The NC Film Council operates as an advisory board to the Governor. We have tossed around ideas and have certainly been approached by people with many great ideas in hand. The incentive has been the quickest, obvious and necessary step to take.

    Again, I am very glad that you are looking at this. Please let me know if I can be of assistance to you with Hannah Gage and Erskine Bowles.

    Respectfully yours,
    Betsy Jordan

  8. Thank you for your comments Betsy.

    You said:

    "I'm not sure that the University system is the best place to house a private venture...however, if you were to hand this off to the graduate school in some form of business simulation, you may be able to work out the kinks."

    This is a point on which I’ve obviously been unclear. I don't think it would be legal for the universities to operate a for profit business. I'm only proposing that the university develop this institution, then disassociate itself. The university system would only be involved up to a point. They would create the documents that govern the institution, incorporate it, and help selecting a board to govern it. At this point the university and the new institution would detach from one another and cease to have any operational relationship. The institution would become an independent, for profit business.