Determing a Feasible Budget

Having a basic knowledge of schedules and budgets is essential for a producer to be successful in raising money for a production. Although the specifics of doing breakdown sheets and production boards are best left to computer programs like Movie Magic and Gorilla, the interplay between physical production and development in the process of getting a movie made requires a basic understanding of the dynamics of moviemaking.

There is always an order and approach to scheduling and budgeting narrative content (again, network reality and comedy series are an entirely different animal, as is gaming). This is largely determined by available budget, and frequently filmmakers find themselves caught between the “chicken-and-egg” dilemma: Does the budget determine the film, or does the film determine the budget? Often it’s a compromise between the two, with a bottom line beyond which the film is irrevocably compromised.

Start with the Screenplay

The blueprint for the budget and schedule always resides in the screenplay itself. The first thing the line producer, production manager or assistant director does is identify script elements and their relative importance in the film, and therefore in the schedule. (The most important scenes are usually scheduled initially, depending on location, with scenes that can be abandoned occupying the latest part of the schedule in case financing should not come through as planned). This begins the script breakdown process, which is the first key element in preparing a realistic and feasible budget.

Software like Movie Magic offer templates for painlessly completing this process, and the program is not difficult to learn or teach. The software helps produce a production grid or board that shows the number of shooting days, compares the advantages of five versus six day shooting weeks, and allows for cover sets and stage work in the event of inclement weather or other production delays.

The constants that remain in any budget must be analyzed first: story and rights costs, talent costs (including director, writers, actors and other so-called above-the-line participants), crew and labor costs (aka below-the-line), fringe and benefit costs, location or stage costs, equipment purchase and rental costs, wardrobe, hair and make-up purchase and rental costs, and finally special effects and music costs.

Budgets serve as the foundation for any production, and must realistically anticipate what the movie will cost. Many a producer has rued the day he or she agreed to a lower budget than required simply to get a movie greenlit.

When estimating story and writing costs, the underlying rights, any turnaround costs (from previous studio deals or options) and credit bonuses (for full or partial screenplay or story by credit) must all be taken into account. Likewise, directors often have bonuses and perquisites in their deals that must be financially accounted for.

The value of storyboards becomes particularly important in helping to evaluate the costs of filmmaking, because of the ubiquity of visual and special effects, computer generated imagery and animation in almost every major feature film. Without accurate storyboards, it is impossible to effectively budget these effects, which are an increasingly large share of every film budget.

Impact of Location

Some of the key budgetary decisions will also be made during the location scouts, which will enable the producer to determine what can be shot on location, and what will require stage or studio space. The production designer’s budget of what it will cost to produce the look of the picture will also derive much of its detail from decisions made at this stage.

As a film commissioner you can have a huge impact by helping the producer find what they need. While never a good idea to tell them that you have the perfect place based on your visions, there are ways of helping them find what they need.

The other most detailed and delicate negotiations for the production involve the talent, and the many demands made by A-list and even B-list talent in today’s industry. This is especially relevant if a smaller film is relying on the presence of a major star to secure financing for its production budget. A star comes with various and assorted costs, all of which must be budgeted.
These can range from paying to house and feed a star’s entire entourage (personal assistant, personal publicist, personal hair and make-up stylists, personal trainer, personal nutritionist) to meeting specific demands on sizes of trailers and housing, and makes of vehicles, first class travel, and the ability to bring along chefs, drivers, stunt and camera doubles, families, nannies, good ‘ol boys and select female or male companions.

The many aspects of post production, from the digital editing suite to motion capture and manipulation systems, also need to be fully budgeted. The sound mix, Foley (sound effects) and looping (substituting alternate performance or dialogue insertions) and other stages of post production are increasingly complex and expensive, and even a simple stereo mix can be a technical nightmare.

Insurance & Completion Bonds

One of the final and critical costs for any production is insurance and bonds. Insurance for the budget, cast, equipment, employees, and errors-and-omissions (E&O) insurance are a necessity. Other kinds of insurance, such as coverage for weather delays, should not be determined until a date closer to production. A completion bond guarantees to the financiers that a film will be finished, even if it is by the executives or contractors of the bond company itself. (To know what that experience was like, just ask Spike Lee about Malcom X, and get ready for the explosion.) There are no special bargains in this part of the business, and any that are proffered should be regarded with a leery eye.

The other expense producers have to consider, on an independent picture, is paying for a completion bond. This will cost as much as 2.5% of the overall budget, but it guarantees the financiers that the movie will be finished, because the completion bond employs producers who will assume control of the production. Many banks and other financiers will not provide production funding without a completion bond. Filmmakers don’t particularly like having a completion bond company involved in the film because it may mean having people breathing down their neck and interfering with the creative process. If for some reason the production is going horribly awry, the bond company can step in and take control of the film. This is a director’s worst nightmare.

(Note: completion bonds are not needed on studio and network productions since the makers of the movie or television show are also the investors, so no outside guarantor is required. That does not mean that oversight is less critical as the producers are beholding to the studios executives to keep the production on or under budget.)

Most producers try to be sure to include a 15% contingency line, based on the overall production and post production budget and excluding talent and story costs. Sometimes this cost is clearly identified as a contingency. At other times, when attempts to hold down the budget must be overtly demonstrated, the contingency is simply built in as an overage in multiple department budgets, known only to a select few (producer, production manager, accountant), and never to the department head.

The Bottom Line

Most movies will cost more than they are anticipated to cost. Even the best efforts at pre-planning and accurate budgeting and scheduling will not completely prevent this likelihood, because in film productions something invariably goes wrong, and the consequences cost money.

Sometimes a film costs what it costs, and really can’t be made for less. This seems to occur most often of a very, very big film or a very, very small film (in the under $100,000 category). Episodic television, on the other hand, tends to consistently hit its budget numbers for a number of reasons: a) the power is generally held by the producer, not the director; b) the episodes have to be completed in the given time frame (generally churning out an episode every 8 days); and c) due to the ongoing nature of the project, patterns are developed that help keep the finances steady.
That predetermined number must be a realistic fit with the movie planned for production, or nothing but trouble awaits all parties. Simply agreeing to a budget number that satisfies a financier’s balance sheet but is not enough to shoot what’s in the script is, simply put, a bad business decision.

To make sure that a budget is professionally accurate, have a professional prepare it. Movie Magic Budgeting can help fill in the blanks, but it doesn’t necessarily give all the right questions to ask. Hiring an experienced production manager, first assistant director and/or line producer to do a thorough shooting schedule, board and budget for a feature film is one of the best investments a producer can make. Even if one financing opportunity falls through, the information gathered in putting together a realistic and relevant budget and schedule is never time wasted – this becomes the core of a producer’s game plan to get his or her movie made.

It is not the job in the budgeting process to worry about ultimate profit or loss. If a budget is assembled with the goal of ensuring profitability, then the production will inevitably fail, since the budget must reflect the actual costs of the action the screenplay describes. If the agreed-upon number is inherently artificial, the results will be satisfying to no one.