A proposal for a system of sustainable film financing in North Carolina

[Steven C. Fox]

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

Background

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.

Problem

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.


Solution

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.

Methods

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.