CASE PROGRAM 2007-98.1
Reviewing the Australian film industry
An indigenous film industry is not about the box office – the French value on culture, diversity, and the value of a mirror on society is a far more relevant model.1 John Maynard, Producer, Romulus My Father Australia is a strange place when it comes to film finance. It’s always been puzzling to me. You speak the same language, you’ve got great production facilities, you’ve got studios down there, you’ve got great locations, and you have some of the biggest stars, but when it comes to actually making movies for the international market, it rarely happens that you have an Australian producer who finances it using Australian money which hasn’t been subsided and makes it as an international film.2 Jared Underwood, Film financier Film investment is probably one of the riskiest investments and even if you go on to Hollywood, less than one in ten films actually go into a profit. Most of the world is independent film making and wherever you go, anywhere in Europe, there's always some sort of subsidy to support an independent film industry.3 Brian Rosen, Chief Executive, Film Finance Corporation
After a renaissance in Australian film-making during the 1970s, by 2006 production levels had slumped to their lowest point since the early 1990s. Spending on television drama was in decline and foreign film production had plummeted dramatically from previous years. As private investment was dwindling, financing was increasingly in the hands of the Film
This case was written by Marinella Padula, Australia and New Zealand School of Government, for Peter Thompson as a basis for class discussion rather than to illustrate either effective or ineffective handling of a managerial situation.
Cases are not necessarily intended as a complete account of the events described. While every reasonable effort has been made to ensure accuracy at the time of publication, subsequent developments may mean that certain details have since changed. This work is licensed under Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Licence, except for logos, trademarks, photographs and other content marked as supplied by third parties. No licence is given in relation to third party material. Version 23-10-2007. Distributed by the Case Program, The Australia and New Zealand School of Government, www.anzsog.edu.au.
1 Dolman, A. ‘Foreign Financing Avenues for Australian Feature Films’ Australian Film Television and Radio School. August 2006 p.7. 2 ibid. p.47. 3 Film industry and investors’ Saturday Extra, ABC Radio National, Broadcast Date: 25 March, 2006. 1
Finance Corporation and similar bodies. Concern within industry and government led the latter to launch a review of film funding support in July 2006. The aim was to examine the efficacy of federal assistance schemes and how they could be best applied to ensure the long- term vigour and viability of the local film industry. Submissions were sought from Australia’s film-making community and the results would be announced as part of the 2007- 2008 budget.
Importance of the film industry
Storytelling has been a critical mechanism for transmitting and preserving knowledge, traditions and values throughout time and filmmaking has been a significant part of Australia’s cultural life for more than 100 years. The Story of the Kelly Gang (1906) was one of the first feature films ever produced, if not the first, and Australia was a pioneer of the nascent medium. Film explored different facets of Australian life and gave the outside world an insight into what was, for most, a distant and unfamiliar nation.
Many renowned directors, cinematographers and actors trained in Australia and/or honed their skills in the local industry before launching international careers. Some would return to shoot features or lend their expertise to emerging film-makers. George Miller and Baz Luhrman were two directors who had parlayed their overseas success into big budget local productions such as Happy Feet and Moulin Rouge. Overall, the industry was responsible for the direct or indirect employment of approximately 50,000 people, from lighting technicians to cinema staff.4 Each film shot in Australia had multiple flow-on effects for local businesses and the economy.
One of the most notable Australian examples was the 1986 film, Crocodile Dundee starring laconic comedian Paul Hogan. On its release it became a US box office hit and, together with Hogan’s “Shrimp on the barbie” ad campaign, prompted record numbers of American tourists to holiday “Down Under”.5 More recently in New Zealand, a 2003 Ministry of Tourism survey found that more than 75,000 arrivals cited the Lord of the Rings trilogy as a reason (or the reason) for their trip.6
Furthermore, Australia had become an attractive destination for foreign filmmakers. Despite the distance, government incentives, lower costs and ready pool of talent had lured big budget productions such as Superman Returns, The Matrix and Star Wars: Episode II. Sydney and more recently Melbourne had developed studio facilities to accommodate television and film productions, the latter built in partnership with the Victorian Government. During 2003-2005, almost $500 million7 was spent by foreign productions in Australia, though that figure plummeted dramatically in 2005/06 (Exhibit A).
4 ‘Industry Overview: Employment’ Australian Film Commission www.afc.gov.au/gtp/oesummary.html#Rdy11090 Accessed 2007. 5 ‘New Australia to lure tourists.’ The Bulletin 14 September, 2005. 6 Media Release ‘Growing Obsession with Movie Locations Fuels Tourism Industry’ University of Central Otago, 8 October, 2004. 7 All figures in Australian dollars. During 2002-03 the Australian dollar averaged $US 0.58c. In 2005-2006 it averaged $US 0.74c. 2
Industry overview
According to the Australian Bureau of Statistics, by the end of June 2003 there were 2,174 film and video production services businesses in Australia which employed some 16,427 people. 8 Of those businesses, 182 were involved in the production of feature films. Nearly 60 percent of the total workforce was employed on a casual/temporary basis and the majority of workers were male (60 percent). Artists and production related professionals comprised 42.2 percent of the sector while the remainder were generally engaged in technical support (27.5 percent) or managerial/ administrative roles (26.3 percent).9 The vast majority of businesses (84.5 percent) employed fewer than four people but over half of all workers were employed by the 1.6 percent of companies with more than 100 employees.10 However, the number of staff employed by any one company could fluctuate considerably depending on what stage of production its projects were in.
During the 2002-03 financial year, film and video production businesses generated $1,596.6 million in income and incurred $1,504.8 million in expenses. Labour costs accounted for just over 30 percent of business expenditure. Overall, their operating profit before tax was $91.7 million, which represented an operating profit margin of 5.9 percent.11 This sector was involved in a wide range of activities, including the production of feature films, television programs, commercials and post-production services. For example, in 2005-2006, an estimated $18.5 million12 was spent on telemovies and $22 million13 on filming mini-series. In fact, feature films accounted for less than 4 percent of industry revenue, whilst productions for television accounted for almost 25 percent.14
Although feature films only represented a small proportion of industry output, they were by far the most expensive product. From July 2000 to June 2006, 50 percent of Australian feature film budgets were an average of $3 million and above.15 However, the average box office takings for Australian films in 2006 were $1.1 million per picture.16 According to Film Finance Corporation estimates, the costs of shooting Australian features had risen substantially in the past decade, particularly location, equipment, storage and wage costs. Geographically, the film and video production sector was concentrated in New South Wales which had over 50 percent of the market share. Victoria and Queensland accounted for most of the remainder.17
The producer and production
While their involvement varies, producers often lead a film from the earliest stages of its inception, right through to its theatrical release. It is an extremely speculative profession that
8 Australian Bureau of Statistics ‘Television, film and video production’ Survey 8679 (2002-03) p.4. 9 ibid. p.15. 10 ibid. 11 ibid.p.4. 12 ‘Number and total production budgets for telemovies shot 1990/91–2005/06’ Australian Film Commission http://www.afc.gov.au/gtp/mptelemoviesummary.html Accessed June 2007. 13 ‘Number, total production budgets and hours of mini-series shot 1990/91–2005/06’ Australian Film Commission http://www.afc.gov.au/gtp/mpminiseriessummary.html Accessed June 2007. 14 ibid, p.18. 15 ‘Feature films shot July 2000 to June 2006 (2006 dollars)’ Australian Film Commission, http://www.afc.gov.au/gtp/mpfeaturesbudget.html Accessed June 2007. 16 ‘2006 Box Office Backgrounder’ Australian Film Commission, January 2007 p.3. 17 ibid. p.21. 3 demands high levels of patience, troubleshooting ability and entrepreneurial flair. Some producers were directors who started their own production companies and moved between roles, others began their careers in television production before venturing into film. From 1991-2001, the proportion of people in film and video production with tertiary qualifications climbed from 47 percent to 58 percent.18 While the technical aspects of production were well covered, few arts education institutions in Australia offered in-depth training addressing the legal and financial dimensions.
Production stages
Most feature film productions pass through the following phases, although producers often work on multiple stages and projects simultaneously. Few projects get past initial planning.
1. Obtaining source material 2. Securing finance and budgeting 3. Assembling a team 4. Pre-production (e.g. rehearsals) 5. Filming 6. Post production (e.g. editing) 7. Marketing
Each stage requires complex legal and financial arrangements: music licensing, contract negotiations and television rights are just some of the matters addressed, directly or indirectly, by producers. Film productions also have to comply with a raft of local, state and federal laws, from child welfare legislation to fire regulations. For all the effort involved, typically only 1 in 10 films ever recoups its budget.19 Whilst film production stages are similar around the world, the order and emphasis stage differs. A 2003 AFC study outlined three major models of project development:
The “Hollywood” model – essentially outcome-oriented and heavily reliant on a strong professional skill base. In Hollywood, the process of selecting projects tends to begin with a decision by key people to work with each other. This will be followed by the choice of a strong idea for the project, or the acquisition of a promising script or the rights to a good story. At any point, the studio can decide to give the project the green light. The Hollywood industry is distinguished by its ability to make early green light decisions, which fundamentally change the basis on which development proceeds.
The “European” model – essentially a process of persistent refinement, with teams working solidly on drafts until a project is as good as it is likely to get, followed by attempts to obtain production finance. In this model, the project selection process tends to begin with a strong idea or draft script being brought to a team of collaborators by one of its members, usually a writer or writer/director. The team then embarks on script development working together.
The “Australian” model – essentially opportunistic, characterised by incremental steps and the establishment of “holding positions” until production opportunities arise. The project selection process in Australia generally focuses on a promising script, with the strength of the idea often less significant than the quality of the writing. In the Australian model the choice of a script tends to precede assembling a team, and the team may well comprise people who have
18 ‘Proportions of employees with various levels of qualifications by industry, 1991–2001’ Australian Film Commission, http://www.afc.gov.au/gtp/oequals.html Accessed June 2007. 19 Dolman, A. ‘Foreign Financing Avenues for Australian Feature Films’ Australian Film Television and Radio School, August 2006 p.51. 4
not worked together before... [A] script-based model of development remains the primary pathway to production in Australia.20
For industry observers Geoff Gardener and Bruce Hodsdon, the primacy of the script was a definite weakness:
“When there is discussion as to why so few Australian films reach any significant quality standards the usual answer seems to be that more work needs to be devoted to getting better scripts into production. Government institutional resources which support development seem to be determinedly focused on this element of production. This overlooks the fact that ultimately films are made by producers and directors...The emphasis on scriptwriting above all may in fact be harming our film-making. What seems to be needed is not more scriptwriters writing and rewriting under the aegis of committees of bureaucrats or producers or even in elite workshops, but writers working with directors and producers or writers working on treatments by directors – a striving for synthesis not endless diagnosis. ‘If it’s all in the script why make the movie?’”
They wanted to see more formal and informal mentoring processes to be developed within the institutions and industry so that directors, writers and producers could work more collaboratively and to enable talent to remain in the industry and in Australia.
In almost 80 percent of Australian films, writers were involved in initiating the project, whilst producers were involved approximately 50 percent of the time. However, producers were rarely the sole instigator. In Australia, there also tended to be a greater degree of role overlap (e.g. writer/directors) as compared to the US and UK. Australian producers typically took 20 months to secure finance. In 2003, the average Australian feature film spent close to four years in development (from first draft to pre-production). For roughly one in five films, the process took six years or more. For Film Finance Corporation Chief Brian Rosen, this presented a significant problem:
“Obviously this is a numbers game, and you have to make X amount of films to get success. The same goes for Hollywood; they make 250 films a year, of which 20 or 30 actually make profits. The rest don’t. So when you look within the industry here and you’re only making 15 or 18 films a year, then how do directors and film makers skill themselves up? Because it is an art form, and you have to keep working at it... [Instead of making] one film every five or six years, it would be a much healthier industry if they could make a film every two years.”21
The life of an independent producer was often a peripatetic one, where businesses were run on a shoestring and survival was on a project-to-project basis. Financing difficulties meant that producers (and directors) often had to return to television or advertising to sustain themselves, further delaying projects. Unsurprisingly, feature film production involved a high rate of attrition. At best, only a third of producers in Australia make more than one feature film. Fewer than 20 percent have three or more credits.22 The figures were similar for directors and screenwriters.
20 ‘Development of feature films in Australia: A survey of producers, directors and writers.’ Australian Film Commission, May 2004, p.2. 21 ‘Film industry and investors’ Saturday Extra, ABC Radio National, Broadcast Date: 25 March, 2006. 22 ‘Building a career as a feature filmmaker’ Australian Film Commission, www.afc.gov.au/gtp/oefocuscareer.html Accessed June 2007. 5
Recent trends
The past decade had presented the Australian film industry with significant challenges. In 2005, local box office revenue totalled $818.5 million of which Australian films generated $23 million or 2.8 percent. This was up on the preceding year but below the 10 year average of 4.8 percent. Of the 330 feature films released in 2005, 27 were Australian.23 US product continued to dominate the local market, accounting for 85 percent of takings.24 From 2000- 2006, only two Australian films managed to finish in the top 10 box office earners of each year. Hollywood studios were also increasingly being subsumed into global entertainment conglomerates which controlled production, distribution and marketing functions. Yet despite the fact that the US film sector garnered the lion’s share of global revenue, the proportion varied considerably between countries (Table 1).
Table 1: Comparison of industry market share 2000-200425 Country Average number of % of total films % share of box office local films released released takings Australia 22 8.2 5.2 France 214 41 36 Japan 270 42.5 34 Canada 69 17 3.2
When it came to exporting Australian films to overseas markets market, the situation was similarly difficult: “Most of the recoupment on investment in Australian feature films comes from international sales as contributions from the Australian market are usually cash flowed into the production budget in the form of pre-sales and distribution guarantees. Since the late 1990s, there has been a contraction in the number and size of sales of Australian (and other independent) feature films to overseas markets. This has had a negative impact on the profitability of Australian feature films and recoupment levels.’26 While the proportion varied considerably each year, from June 2000 to June 2005, an average of 76 percent of Australian feature films garnered a local cinema release. Just under 16 percent of Australian feature films secured a UK release, during the same period. In the US, the figure was just over 21 percent. During the 1980s, the average proportion for each country was 27 percent and 32 percent, respectively.27
In his 2005 survey of local producers and foreign distributors and sales agents, Adam Dolman explored the many difficulties Australian films faced in attracting overseas distribution and finance. US distributors/agents were especially reluctant to market Australian films in an increasingly crowded sector. (In recent years, many major studios had created in-house divisions specialising in “independent” films.) Some felt that the grim subject matter of many recent Australian films compounded the problem. For others it was more about cultural specificity. Said one observer: “If it’s really an Australian film, through and through, maybe one in every one or two hundred has some appeal outside of there and
23 ‘Review of Australian Government Film Funding Support: Issues Paper’ Department of Communications, Information Technology and the Arts, July 2006 p.5. 24 ibid p.4. 25 Figures from ibid. pp.4-5. 26 ibid. p.5 27 ‘Release Success of Australian Productions’ Australian Film Commission, http://www.afc.gov.au/gtp/mrproportions.html Accessed June 2007. 6 does some business.”28 Filming “international” stories with universal themes was identified as one way to achieve cross-over success but industry insiders warned against making overtly “Americanised” products. Said Matt Brodlie, Senior Vice President of Tristar Pictures:
“I think that it’s foolish for filmmakers or producers in other territories to try and make an American type film, because Hollywood will spend $80m and blow you out of the water. So don’t try to compete on that level. Just try to do whatever story makes sense for the particular filmmaker…. Whatever story it is they want to tell. You always have to go through an analysis and figure out if it’s going to make its money back, and just be realistic. Don’t count on a huge American Box Office, but if you get that, that’s gravy on top.”29
Distributors and agents also observed that producers frequently lacked adequate sales skills, or hadn’t performed the necessary groundwork before approaching them. Meanwhile, some Australian producers like David Redman found “...a real schism between what international distributors and Australian distributors are looking for, mentioning that the more commercial projects on his slate that attracted international attention had difficulty attracting the attention of local distributors which were more skewed to art house Australian films.”30 In 2005-2006, the vast majority of films produced in Australia were dramas (53 percent) or comedies (29 percent) (Exhibit B) and most began as an original idea (81 percent) rather than an adaptation (19 percent).31 By contrast, half of Australia top 20 box office earners were sequels or remakes.
Australian films not only had to compete with their foreign counterparts, they also had to contend with an increasing range of entertainment devices and products. Computer games had grown enormously in quality and popularity whilst the internet had also opened up many new entertainment avenues. Home theatre systems had become increasingly affordable and it was usually only a matter of months between a film’s cinematic and DVD release. The declining cost of the latter continued to fuel their popularity.
Television was the other main avenue for film industry output and spending on television drama was in decline (Exhibit A). Drama accounted for less than 10 percent of broadcast time.32 Like film, TV had to contend with new modes of entertainment and audiences were becoming ever more fragmented. Tighter competition for advertising revenue prompted executives to look for more profitable formats. On average, adult drama cost $220,000 per hour to produce (Exhibit B). Reality TV programs, for instance, were not only cheaper; they also opened up new revenue streams. Television stations had also become increasingly conservative. Where programs had once been given a chance to build an audience, shows were now routinely dumped if they weren’t immediately successful.
However, some changes had been positive. The internet had proved to be an enormously powerful tool in testing, distributing and marketing films. Clips from small, independent features or short films could be released via sites such as You Tube and reach a global audience instantly. These advances had occurred in tandem with the increasing quality and falling cost of digital technology which had been a boon for low-budget productions.
28 Dolman, A. ‘Foreign Financing Avenues for Australian Feature Films’ Australian Film Television and Radio School. August 2006 p.48. 29 ibid. p.75. 30 ibid. p.8. 31 Development of feature films in Australia: A survey of producers, directors & writers.’ Australian Film Commission, May 2004, p.4. 32 Opcit, p.12. 7
Meanwhile, the exploding popularity of personal entertainment devices (video iPods, PSPs, etc) had fuelled the development of content specifically for small screens and short-attention spans. DVDs also had their benefits. Even box office flops could sometimes go on to become hits long after the film disappeared from cinema screens.
And despite the dent new technologies had put in box office takings around the world, cinema attendance was still a part of most Australians’ lives. In 2006, close to 70 percent of had been at least once in the past 12 months but the frequency of attendance had generally been in decline since the late 1980s. 33 Even so, it was still by far Australia’s most popular cultural activity, drawing more than twice as many patrons as music events. In 2006, there were 83.6 million cinema admissions and Australian box office takings totalled $866.6 million, which was a substantial increase on the previous year.34 In terms of audience, 29 percent of Australia’s cinema-going audience was aged 14-24, while 27 percent were over 50 years old.35
Industry support
While Australia had a prolific industry in the early days of film, by the 1920s US distributors essentially had de-facto control of what was exhibited in Australia.36 In recognition of the importance of the film industry and the difficulties associated with film-making, a number of inquiries and proposed schemes looked towards redressing the situation. Limited competition and strong corporate opposition to intervention meant that little changed until the 1970s when the federal government launched several new initiatives. It began with the establishment of the Australian Film Development Corporation (AFDC) in 1970 (later replaced by the Australian Film Commission (AFC) in 1975) to help promote local productions. Meanwhile, the Australian Film, Television, Television and Radio School (AFTRS) was established in 1973 to develop local expertise. This coincided with the Tariff Board inquiry of 1972-73 which found that: “the Australian distribution and exhibition network is to a great extent an integrated arm of the marketing activities of foreign film producers” and called for distributors to invest in and distribute Australian films.37 The inquiry’s recommendations were not adopted but local distributors did begin to invest more in Australian productions. Overall, this 1970s saw a more than three-fold increase in industry output compared to the 1950s and 1960s. This level of production more than doubled during the 1980s and was widely attributed to the introduction of the 10B and the10BA schemes.
Tax incentives
During 1978-1980, the Income Tax Assessment Act 1936 was amended to attract private investment to the Australian film industry. Under Division 10BA, investors acquiring an interest in the copyright of new, qualifying Australian programs receive a 100 percent tax concession (Exhibit C). Originally, 10BA investors were allowed to claim a 150 percent tax concession and to pay tax on only half of any income earned from the investment. However,
33 ‘What Australians are watching: Cinema Industry’ Australian Film Commission http://www.afc.gov.au/gtp/wcrmattend.html Accessed June 2007. 34 ‘Numbers of Australian cinema admissions and gross box office, 1976-2006’ Australian Film Commission, http://www.afc.gov.au/gtp/wcboadmission.html Accessed, June 2007. 35 ‘What Australians are watching: Cinema Industry’ Australian Film Commission http://www.afc.gov.au/gtp/wcrmageprofile.html Accessed June 2007. 36 ‘The first wave of Australian feature film production: from early promise to fading hopes.’ pp.9-10 37 ‘The first wave of Australian feature film production: from early promise to fading hopes.’ p.5 8 concern about its abuse led the government to gradually scale it back to 100 percent by 1988. Division 10B (Exhibit C) is a broader-based concession whereby initial investors who acquire an interest in the copyright of new, eligible productions receive a 100 percent tax concession over two financial years once the film exists and is used to generate income.38
The Film Licensed Investment Company (FLIC) scheme was an initiative which arose from the Review of Commonwealth Assistance to the Film Industry, 1997. Two FLIC licences were awarded to Content Capital Ltd and the Macquarie Film Corporation Ltd in 1999. Investors received deductions for buying shares in a FLIC, which, in turn, invested in eligible Australian projects, spreading the risk across a range of productions. The scheme carried a 100 percent tax concession over the financial years 1998/99 and 1999/00 and each company could raise up to $20 million concessional capital over the two financial years during that period. However, Macquarie and Content Capital only raised $16.26 million and $6.14 million respectively. Legislation was introduced in 2005 that revived the FLIC scheme and allowed for a single licence to raise $10 million.39
In September 2001, the Federal government introduced a Refundable Tax Offset to encourage producers of large-budget productions to film in Australia. The offset provides a benefit worth 12.5 percent of qualifying production expenditure. The key requirement is minimum expenditure of $A15 million and at least 70 percent of the budget must be spent in Australia on Australian goods and services. To qualify, the applicant must be an Australian resident company, or a foreign organisation with a permanent establishment in Australia and an Australian Business Number. Initially limited to feature films, mini-series and telemovies, legislation was introduced to include television series in 2005. The application for the rebate is submitted with the producer’s tax return in the year the project is completed.40 The Federal Government’s tax incentive schemes were administered by the Department of Communications, Information Technology and the Arts (DCITA) and the Australian Taxation Office (ATO).
Direct funding
The Federal government also established a number of agencies to provide resources and support to Australian filmmakers.41 Federal financial support was provided for:
• productions which are either culturally significant or have commercial potential or both; • script, professional, industry and audience development; • the preservation of our film and television heritage; • advanced education and training of industry practitioners; • the encouragement of private investment in production; • the promotion of Australian films and Australia as a location for filming; and • the encouragement for large budget productions to undertake substantial production in Australia.42
38 ‘Production Industry: Tax Incentives’ Australian Film Commission, www.afc.gov.au/gtp/mptax.html Accessed July 2007. 39 ibid. 40 ibid. 41 In addition, each Australian state (and a number of regional areas) operated their own film bodies to assist productions as well as encourage overseas filmmakers. Each agency worked to slightly different funding criteria depending on their objectives. For instance, to obtain funding from Film Victoria, a significant portion of the film would need to be shot within the state. 9
This support was delivered via the following agencies:
Film Finance Corporation Australia (FFC) The FFC is the principal agency for funding the production of film and television in Australia. It funds the most expensive program formats that are not always able to attract full financing from the market. These formats include feature films, mini-series, telemovies and documentaries. FFC assistance was open to all Australian film and television producers/ production companies with the exception of broadcasters, pay television channel providers and companies with less than 50 percent Australian ownership.
Australian Film Commission (AFC) The AFC is the primary agency for supporting development of film, television and interactive media projects and their creators. The commission focuses on project, audience and market development for the independent production sector (i.e. companies and producers who were not affiliated with broadcasters or major distribution and exhibition companies). Since 2003, it includes the National Film and Sound Archive (NFSA).
Film Australia Ltd (FAL) FAL produces and distributes documentary programs under its National Interest Program (NIP) which examines matters of national concern or which illustrate or interpret the lives and activities of Australians. Film Australia maintains its Lindfield site, a library and an archive, which are accessed by the independent documentary sector at reduced rates.
Australian Children’s Television Foundation (ACTF) ACTF is a national, non-profit organisation. It encourages the development, production and dissemination of television programs, films and other audiovisual media for children.
Ausfilm Ausfilm is a not-for-profit organisation which markets Australia as a destination for film production and provides advice on all aspects of filming in Australia.43
Table 2: Film agency funding 2006/200744 Agency/Organisation Funding $ million Film Finance Corporation Australia (FFC) 70.50 Australian Film Commission (AFC) 52.49 Film Australia Ltd (FAL) 13.17 Australian Children’s Television Foundation (ACTF) 2.58 Ausfilm 1.35 Total 140.09
During 2005/2006, 47 percent of Australian film funding came from government sources (Exhibit B) and the majority via the FFC.45 However, before shooting a feature commenced,
42 ‘Review of Australian Government Film Funding Support: Issues Paper’ Department of Communications, Information Technology and the Arts, July 2006 p.8.
43 Review of Australian Government Film Funding Support: Issues Paper’ Department of Communications, Information Technology and the Arts, July 2006 p.8. 44 ibid. 45 While state bodies did provide grants, funds were limited and contributions were generally capped at 10% of the production budget. At Film Victoria, for example, funds were offered on a one-off basis where FV was not the primary investor. 10 producers would also often apply for development funds to support the project’s early phases. A 2003 AFC report found that 56 percent of films surveyed received development funds from one or more government bodies. However, a significant proportion (35 percent) did not apply at all, citing four key factors:
• inadequate maximum funding per project; • scarcity of funding making the application process too competitive; • the timeframes involved in applying for finance; • a perception of excessive bureaucracy.46
More than a third of film-makers reported supplementing development costs with their personal funds and only 28 percent were satisfied with the size of their development budget.47 Inadequate development funds were blamed for both slowing production and rushing into filming with a less than optimal script. In some cases, film-makers had to interrupt production to find other work or key personnel were forced to withdraw. When it came to production investment, proposals were typically subject to a rigorous evaluation process and a lengthy set of requirements. And support could come in a number of forms. The FFC, for example, could:
• undertake direct investment; • acquire, obtain, deal in and exercise rights; • make or participate in loans (including print and advertising loans); • provide investment guarantees, and underwriting agreements; • lead or participate in loan syndicates and similar joint ventures.48
FFC applicants would be assigned an investment manager who would advise them on how and when to apply. Each project was evaluated by the FFC board which consisted of six to eight directors, usually prominent figures in the arts and finance industries. In 2005/2006, the FFC distributed $75.78 million across a total of 65 projects. Each category of production was allocated a share of the FFC investment budget, the greater proportion going to film (51 percent) followed by television drama (37 percent) and documentaries (12 percent).49 Where there was heavy demand for funds in a particular category, the FFC would put approvals on hold and assess projects competitively.
Likewise, high numbers of applications early in the funding cycle often led to the exhaustion of funds by the end of the first quarter. Unprecedented demand in 2005/2006 led the FFC to introduce funding rounds. Feature film funding, for example, was now awarded four times a year: July (35 percent); September (25 percent); December (20 percent); and March (20 percent). The FFC also attempted to distribute funds equitably throughout the production community. While it recognised “the benefit to producers of sharing overheads and the value to the industry of having successful and diversified production/distribution companies”, the FFC wanted to ensure that funds were “not unduly concentrated in the hands of a small number of companies.”50 Funding decisions usually followed the advice of investment
46 Development of feature films in Australia: A survey of producers, directors & writers.’ Australian Film Commission, May 2004, p.13. 47 ibid.p.15. 48 ‘Film Finance Corporation: Investment Guidelines’ Film Finance Corporation www.ffc.gov.au/investment Accessed July 2007. 49 Film Finance Corporation Annual Report 2005/2006 Film Finance Corporation, 14 September, 2006 p.9. 50 ‘Investment Guidelines’ Film Finance Corporation, www.ffc.gov.au/investment Accessed July 2007. 11 managers. Successful applicants had to be eligible under the 10BA scheme and were subject to conditions which included that the FFC approve budget variations.
A recent change was the 2004/2005 introduction of the FFC’s Two Door policy for feature film funding. Projects entering through the Evaluation Door were assessed in three key areas: creative potential, market potential and audience potential. The FFC would also consider how the proposed film contributed to the overall diversity of its investment slate. Evaluation Door films required the involvement of a qualified director, producer and writer as well as a proof of market interest. Meanwhile, projects which had raised at least 25 percent of the production budget through, for example, pre-sales or distribution guarantees could enter through the Marketplace Door. For these projects, the FFC would generally limit its contribution to 45 percent of the budget. Of the 40 features considered during 2005/2006, 17 were awarded finance; 11 through the Evaluation Door, 6 through the Marketplace Door.51
While the FFC had developed a reputation for not only imposing more stringent funding guidelines, in 2005/2006, the FFC only recouped $9.19 million of its investment funds – the lowest total in more than 15 years. The majority of recoupment funds came from overseas sales (71 percent). Wolf Creek was the only film of the past 12 months where the FFC had regained its full investment. Some blamed the reticent private sector:
“The lack of involvement from Australia’s private sector in film finance was something that many Australian producers cited as an issue for film financing in this country. It was an issue that the foreign community identified as being a weakness. They noted that as a result of this lack of involvement there is an increased reliance on subsidy, and in turn, this ‘soft money’ diminishes the drive films should have to seek recoupment in the marketplace. An increase in private sector financing could provide this ‘drive’ to seek investor returns, and take the burden off government subsidy.”52
“The great Australian stories cannot be told at the moment,” said Geoff Brown, the Executive Director of the Screen Producers Association of Australia (SPAA). “We just cannot raise the money. Bryan Brown said to the Prime Minister over dinner last October, ‘Prime Minister, do you understand that Breaker Morant couldn't be made today?’ The Prime Minister said, ‘Well, please explain.’ Well Bryan said, ‘When we made Breaker Morant Bruce Beresford had $600,000 and he cobbled together another $2 million to get the thing finished. That’s now an $18 million to $20 million-minimum Australian film to make, and there are no effective mechanisms out there to attract the money in from the private sector to do that, nor is the money there at the Film Finance Corporation. So that story would not be made.’”53 Geoff Brown believed it was time for a new approach:
“What we need to do is grow production budgets and production businesses to scale. We’ve been limited over the last ten years in particular by what’s there at that FFC door, and the average budget for an Australian film, $4.5 million, $5.5 million. Now that restricts you on the stories you can tell, it limits the storytelling....Film is tough at the best of times, but when Australian producers are limited to a one-door approach for financing of their films, it creates particular problems. At the moment because of the collapse in private investment, through the
51 Film Finance Corporation Annual Report 2005/2006 Film Finance Corporation, 14 September, 2006 p.6.
52 Dolman, A. ‘Foreign Financing Avenues for Australian Feature Films’ Australian Film Television and Radio School. August 2006 p 53 Film industry and investors’ Saturday Extra, ABC Radio National, Broadcast Date: 25 March, 2006.
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failure of mechanisms like Parts 10B, and 10BA of the Tax Act, the industry has been effectively left with one door to go through for financing, and that’s the Film Finance Corporation of Australia.”
According to Geoff Levy, chair of Investec Bank Australia, the trouble was the multiplicity of easier and safer ways to make money: “The investors have been burnt, because for a number of years a lot of Australian movies just have not given the returns that investors could get in the property market, in the stock market, in so many other places, with a lot more certainty, because remember, once your money’s gone into the movie, if it doesn’t succeed, that’s it, you’re not left with a piece of land or a mine that you can resell to someone.”54
“The other thing to understand about movies,” he said, “is that it’s quite critical you understand how the money comes in, because when you go to Hoyts, or Greater Union, or Village, or whatever the case may be, you pay your $10 or $12, probably somewhere like 50 percent of that goes to the exhibitor, i.e. to Hoyts, etc., that leaves another 50 percent. That then has to go first of all to pay for the actual movie to get made and the whole PR and advertising campaign. And then after that's paid, whatever's left over has to go to pay anyone who paid a loan and a permanent guarantee, and then only is there something left over for the investor. So in order to really get some money, [a $5 million film] has to do somewhere around $10-million at the box office in Australia, for the investor to recover, not make a profit.”55
The 2006 Issues Paper
Concern about the falling levels of local and foreign film production prompted the Department of Communications, Information Technology and the Arts to launch a review of government support. The Howard Government’s 2004 election policy statement committed to facilitating greater private investment and encouraging a more “entrepreneurial” approach within the sector and in July 2006, the Department released an issues paper. This outlined the various problems facing the industry and the government’s objective which was to see a vigorous, creative and highly skilled local industry with a sound commercial base. It would produce works that:
• are of interest and relevance to the Australian public; • have the potential to attract wider exposure in international markets; • enable a record of Australian life and culture to be kept for future generations and • can successfully compete in a commercial context.56
For the Government, such an industry would be characterised by: • the creation of a rich variety of high quality film, television and other audiovisual productions which have appeal for a range of Australian and international audiences; • the existence of a number of viable long term businesses of different sizes and structures which are competitive in a commercial environment; • marketplace confidence in the quality of the product and a clear understanding of investment vehicles;
54 ‘Film industry and investors’ Saturday Extra, ABC Radio National, Broadcast Date: 25 March, 2006. 55 ibid. 56 ‘Review of Australian Government Film Funding Support: Issues Paper’ Department of Communications, Information Technology and the Arts, July 2006 p.7. 13
• a pool of skilled artists, technicians and business people and training and development opportunities for them; and • the capacity to adapt to change, to meet new and emerging consumer demands and to offer leadership in implementing technological shifts.57
The paper called for industry submissions prior to the review which was due to be completed in May, 2007.
Industry response
Many producers and directors felt that the current system of rebates and subsidies had been of more benefit to financiers and tax scheme promoters, than the film-makers themselves. Late in 2006, director Baz Luhrman met with the Prime Minister to discuss the upcoming review. Treasurer Peter Costello and Finance Minister Nick Minchin also met an industry delegation, including director George Miller, who warned them that the sector was in “crisis”. “All of us, I think, have to do a lot more with a lot less,” Miller was quoted as saying.58 The Independent Producers Initiative (IPI) and the Australian Screen Directors Association (which represented more than 500 directors, animators and producers) made a joint submission in response to the issues paper which called for the following changes:
• the introduction of the Australian Film and Television Production Offset: a new tax offset scheme for eligible Australian productions that would provide a rebate of 40% on qualifying expenditure that could be utilised in conjunction with 10BA and 10B investment, • the amendment of Division 10BA in order to make it more certain and attractive, including the consideration of a 50 per cent tax break on earnings. • the introduction of a 125% accelerated tax deduction for research and development. • a tax offset to producers for distribution costs, in order to encourage greater marketing support for Australian feature films.59
Their submission also urged careful consideration in defining “success” when it came to the Australian film industry. They warned against the media’s tendency to focus on the triumph or failure of a handful of films, or to make direct comparisons between products. “For example, two films that take $5 million at the box office may be seen as similarly successful by some, but it could be that the cost of producing and distributing one is dramatically more than the costs of the other. One film may not make as much box office as another but may find greater audiences on DVD and on television later in its life, or even make greater overseas sales.”60 Some films were even harder to assess:
“How does one measure today the value of an iconic film such as Picnic at Hanging Rock? By the number of people who saw it at the box office when it was originally released? By the TV audiences who have seen it since it was first released? Or by the impact that it has had on our broader culture, the pride that we have had in the international success of Peter Weir, or the confidence and inspiration that it and other successful Australian films have given to subsequent Australian filmmakers?”61
57 ibid. 58 Garnaut, J. and Maddox, G. ‘Tax carrot to get film cameras rolling’ Sydney Morning Herald, 20 April, 2007. 59 ‘Review of Australian Government Film Funding Support: Submission to the Department of Communications Technology and the Arts’ Australian Screen Directors Association/Independent Producers’ Initiative Inc August 2006, p.3. 60 ibid p.12. 61 ibid. p.13. 14
Similarly, FFC Chief Executive Brian Rosen believed in the need to choose appropriate reference points: “...if you actually compare the box office each year over the last four or five years and you take the independent movies, both Australian and foreign, and by independent I mean something like Lost in Translation - films like Sideways, and when you look at the top five films each year, other than 2004, the top five Australian films did more box office than the top five independent foreign films. And so that’s what we should really be comparing, apples to apples. We actually do punch above our weight for what we do make. But we still need to make some films that have a much broader appeal.’62
62 ‘Film industry and investors’ Saturday Extra, ABC Radio National, Broadcast Date: 25 March, 2006. 15
Exhibit A: Feature film and television production activity 2002 – 2006
Feature production
2002/03 2003/04 2004/05 2005/06
Total spend in $225m $367m $335m $133m Australia
By Australian $49m (16 $114m (20 $65m (22 $97m (25 titles) films titles) titles) titles)
By co- $14m (2 $27m (3 $5m (1 title) $13m (3 titles) productions titles) titles)
$162m (5 $249m (7 $243m (9 By foreign films $23m (4 titles) titles) titles) titles)
TV drama production
2002/03 2003/04 2004/05 2005/06
Total spend in $281m $229m $206m $228m Australia
By Australian $214m $189m $189m $179m programs (639 hours) (583 hours) (588 hours) (506 hours)
$12m $10m $13m $23m By co-productions (35 hours) (39 hours) (32 hours) (67 hours)
By foreign $56m $30m $4m $26m programs (29 hours) (16 hours) (3 hours) (35 hours)
Source: ‘Fast facts: Production Industry’ Australian Film Commission http://www.afc.gov.au/gtp/mpfast.html accessed June 2007
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Exhibit B: Feature film/TV drama production and funding
Production of Australian features
Production by decade (total budgets in 2006 dollars):
1970s 14 films (total budgets $20m) per year
1980s 30 films (total budgets $126m) per year
1990s 25 films (total budgets $130m) per year
Proportion with budgets above $3m (2000/01–2005/06) (in 2006 50% dollars)
Top 3 genres, 2000/01–2005/06:
Drama 53%
Comedy 29%
Thriller 10%
Sources of finance, 2005/06:
Government 47%
Australian private investors 8%
Australian film/TV industry, 17% private investors
Foreign sources 28%
Production of Australian TV drama
Proportion of programs with budgets above $3m, 2000/01–2005/06 (in 2006 dollars):
Telemovies 27%
Mini-series 100%
Series/serials 71%
Children’s programs 89%
Average cost per hour, 2005/06:
Adult series $220,000
Children’s drama $701,000
Sources of finance, 2005/06:
Government 20%
Australian private investors 6%
Australian film/TV industry 58%
Foreign sources 16%
Source: ‘Fast facts: Production Industry’ Australian Film Commission http://www.afc.gov.au/gtp/mpfast.html accessed June 2007.
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Exhibit C: Division 10BA and Division 10B
Division 10BA deductions are available to investors in a film that has been certified by a provisional certificate or a final certificate as a ‘qualifying Australian film’.
To qualify for a Division 10BA deduction, you must be a resident of Australia who:
• expended capital monies in producing the film or as a contribution to its production • expected to become the first owner, or one of the first owners, of the copyright of the film, and • Intended to use the copyright to produce assessable income from public exhibition in cinemas or by television broadcasting.
The Minister for Communications, Information Technology and the Arts must certify the film as a qualifying Australian film. It must be:
• an eligible film – a film produced wholly or principally for the cinema or television which is a feature film (including an animated feature film), a documentary or a television mini-series, and; • an Australian film – a film with a significant Australian content made wholly or substantially in Australia or an external territory, or a film made as a result of an agreement between the Australian Government and a government of another country.
An Australian film assessed as having significant non-Australian content may be refused certification.
Ultimately, eligibility for a deduction depends on a final certificate being issued when the film is completed. However, you may claim a deduction on the basis of a provisional certificate.
Division 10B is available to both residents and non-residents and has potentially broader application than Division 10BA. Division 10B applies to a film certified for Division 10B purposes as an ‘Australian film’, whereas Division 10BA only applies to a film certified for Division 10BA purposes as a ‘qualifying Australian film’. Under Division 10B you may be entitled to a deduction for the capital cost of producing an Australian film or the capital cost of acquiring the copyright in an Australian film. If you invest in a ‘qualifying Australian film’, Division 10B can apply to you if you elect that Division 10BA not apply.
You have two methods of claiming a deduction under Division 10B:
• you can deduct the costs incurred over two years, or • you can elect to deduct the costs of the unit over the effective life of the copyright.
If you deduct the costs over two years, half the cost of acquiring the interest in the copyright is deductible in the year of income during which the film was first used to produce assessable income. The other half is deductible in the following year.
If you elect to claim deductions over the effective life of the copyright and you acquire the copyright for a specified period, the effective life is the shorter of that specified period or the period ending at the time the copyright terminates. If you elect to claim deductions over the effective life of the copyright and you do not acquire the copyright for a specified period, the effective life is the shorter of 25 years or the period ending at the time the copyright terminates.
Source: Australian Tax Office, www.ato.gov.au July 2005.
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Exhibit D: Production Case Studies
Rabbit-Proof Fence (2002)
Writer: Christine Olsen; Director: Phillip Noyce; Producers: Christine Olsen, Phillip Noyce, John Winter
1996: Prompted by a newspaper article, Sydney-based documentary maker Christine Olsen reads Doris Pilkington’s book Follow the Rabbit-Proof Fence. After several months of rereading the extraordinary story – often in tears – Olsen contacts publishers University of Queensland Press (UQP) about acquiring the film rights. UQP asks all interested parties to outline how they envisage the film. Olsen tells them the story will be told simply “with the kind of restraint Doris uses”.
1997-1999: Olsen is keen to fly to Perth in WA to meet Pilkington. By coincidence the author is about to visit Sydney, so Olsen pays for her to stay another night so they can meet. That becomes impossible and Olsen drives her to the airport instead, talking all the way. She secures the rights and starts writing. The AFC agrees to pay A$10,000 in development assistance on the basis of Olsen’s first draft, providing she finds a script editor. She gets two rhapsodic responses from her nervous preliminary approaches and chooses Road to Nhill writer Alison Tilson.
July-October 1999: Olsen compiles a “dream list” of directors, headed by Australian-born Phillip Noyce. “I thought Backroads had energy and exuberance and treated Aborigines like people.” Olsen gets Noyce's LA telephone number from “a friend of a friend” and immediately calls. It wakes him at 3am but he graciously invites her to send the script. She sends it in September and calls in October, when she is told he is busy on other projects.
November 1999: Noyce finds the script compelling. “The movie starts as Schindlers List, the story of an evil and efficient system for not so much eliminating people as eliminating a culture,” said Noyce. “It then turns into The Fugitive and becomes a chase movie with very unlikely heroines” A meeting is arranged for when he returns to Australia for Christmas holidays. He sends five pages of script notes.
January-April 2000: Noyce and Olsen work on the script first in Australia, then by correspondence. ScreenWest provides more development money. In Australia, Noyce is staying at the Palm Beach holiday house owned by David Elfick, who produced Noyce’s first feature Newsfront, and Jeremy Thomas, from London sales agent Hanway Films. Noyce gives both men the script. Noyce speaks with FFC Chief Executive Catriona Hughes, who says the FFC is likely to provide finance if a sales agent, local distributor and appropriate private investment are attached.
May–June 2000: Noyce’s other projects stall. He rings Olsen and tells her if she fixes the ending he will shoot Rabbit-Proof Fence in 2000. Elfick joins as Executive Producer and a race to secure financing begins. Olsen invites John Winter on board as the third producer. The team signs on Hanway Films, which offers equity and an advance against world rights. “Other domestic distributors could only see the negatives – that is the history of black relations films in Australia” says Noyce.
July–September 2000: The FFC board agrees to co-finance the US$5m project in a telephone conference. Pre-production begins. Christine King from Mullinars Casting Consultants begins an exhaustive search for the three young leads, eventually taking 10 weeks. The shoot begins in September in SA's Flinders Ranges, with the South Australian Film Corporation becoming an equity partner.
Release and beyond: Christine Olsen’s script is awarded the script writing award at the 2001 NSW Premier's Literary Awards. The film is awarded best film at the 2002 AFI awards and is distributed around the world, earning $7.5 million at the Australian box office. It is also chosen as one of the top
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10 films of 2002 by the prestigious American National Board of Review and receives an award of Special Recognition for Reflecting Freedom of Expression.
Chopper (2000)
Writer/director: Andrew Dominik; Producer: Michele Bennett
1992: Director Andrew Dominik re-reads Mark “Chopper” Read's autobiographical book, From the Inside, published from jail a year earlier, and considers adapting it to become his feature debut. Producer Michele Bennett, with whom Dominik has spent a year working on commercials and music videos, agrees a film could be commercially viable.
1993: Bennett meets with the book’s publishers and eventually signs a one-year renewable option under her production company Cherub Pictures. Dominik writes to Read telling him of their plans but warning the film could be unflattering.
1994–1995: Intensive research begins using court transcripts, newspaper clippings and first-hand accounts from police, prison officers and criminals. Dominik writes the first draft, which resembles the book’s funny anecdotal style. Dominik and Bennett meet with Mushroom Pictures representatives, whom they know through music video work. Three months later, a co-production arrangement is signed and development assistance provided. Bennett meets with the FFC. The second draft gets funding from Film Victoria. It is very different and darker than the first.
1996–1997: A new structure is established in the third draft and retained. Dominik and Bennett meet with Read for seven hours in prison, at Read’s suggestion. Read chooses not to see the script, saying his interest is in what the filmmakers think of him. Casting begins. Meetings occur with local sales agents. There are some negative reactions based on preconceptions about the real Chopper. Much hinges on finding a strong lead. Government development assistance is drying up without a local distributor attached. FFC discussions continue, particularly regarding the violence, which will earn an R rating. Detailed director’s notes help the FFC understand the approach. Script assessments are sought from the US. Palace makes an offer against Australian rights. Eric Bana – suggested by Read – tests for the lead role and is greeted enthusiastically. But Bana’s tape fails to clinch a deal with Beyond or Southern Star.
November 1997 – March 1998: Producer Al Clark joins the team to allay concerns about the first timers. The director and producer continue to support themselves via commercials. Film Victoria rejects an application for production funding. The FFC gets one positive and one negative script assessment and backs off.
April–December 1998: Palace increases its offer to A$250,000. Beyond agrees to commit at this level and Mushroom to cash flow the distribution guarantee. With a positive script assessment on the fifth draft, the FFC board agrees to provide most of the A$3.3m budget. All other backers lift their support, including financing partner Mushroom and Beyond. Palace's guarantee is the highest ever for a local film.
January–June 1999: Rehearsals begin. Pre-production halts after three weeks because of legal complications but resumes three weeks later. An application to Film Victoria for top-up funding is rejected. Shooting begins on May 3.
Release and beyond: Released in August 2000, Chopper goes on to make close to $6 million at the Australian box office. The R-rated film is seen by an estimated 721,000 when it is released onto 138 screens – at the time the largest campaign for specialist distributor Palace. The film also screens at Sundance Film Festival. Eric Bana is awarded best actor at the 2000 AFI Awards (Andrew Dominik wins best director and Simon Lyndon the supporting actor award). Eric uses the role as launch pad for
20 an international career, gaining significant supporting and leading roles in films such as Black Hawk Down, The Hulk and Troy. Andrew Dominik plans to direct a film in the US titled The Demolished Man in 2005.
Mullet (2001)
Writer/director: David Caesar; Producer: Vincent Sheehan
1992–1994: David Caesar writes a short story after hearing his long-time ex-girlfriend is getting married. He wonders if he would go back to the country if his career stalled and remembers when feelings of self-importance prevented him getting on with people. He works all these ideas into a screenplay.
1995: Caesar asks his friend Vincent Sheehan to make Mullet his debut film as a producer. They both moved to Sydney from small towns and are interested in low-budget distinctly Australian cinema about ordinary people. Sheehan jumps on board after reading the script and secures second draft development funding from the AFC.
1996: The AFC provides further development funding, some to cover script readings and preliminary casting. Criminal elements are introduced to raise the story’s stakes in response to certain distributors’ admiration for the crime/comedy combination of Caesar’s second feature Idiot Box.
Early 1997: The script is sent to most of Australia's limited potential industry investors. Sheehan aims to raise a budget of A$2.5-3m, underpinned by the FFC. SBS Independent (SBSI) is enthusiastic but its involvement would deprive a local distributor of a television sale, a perennial problem.
Mid 1997: The NSW Film and Television Office (FTO) provides development money. Sheehan attends the Cannes Film Festival for the first time but fails to raise interest overseas. On his return he and Caesar thoroughly reassess the project. They return to their original low-budget philosophy, strip the genre elements from the script, and work out how to shoot it for about A$1m using widescreen Super 35mm to capture the beautiful countryside.
1998: The FTO provides more script development money. SBSI offers a television presale and equity. Globe signs to release the film locally; they cannot provide a distribution guarantee but their strategy of launching via a country season appeals. Then Premium Movie Partnership (PMP) executive Marion Pilowsky, a long-time fan of Caesar, commits to a pay TV presale and equity.
January 1999: PMP’s offer lapses because other projects find their budget shortfalls and Mullet doesn’t. Caesar and Sheehan meet with Douglas Cummins from UK sales agent Axiom Films (The Bank, The Boys) in a Sydney hotel. Cummins thinks Caesar needs to give the script a stronger identity and sharper characters.
Dec 1999 – Jan 2000: PMP admires the script’s progress and recommits at a high enough level to allow Sheehan to invite Axiom aboard without needing to provide an advance. The NSWFTO commits equity of more than its usual cap of 10 percent of the budget as it encourages films to be shot in regional areas.
Feb–April 2000: Location office Film Illawarra, two hours south of Sydney, warmly embraces the film, particularly as the script was always set in that area.
May–September 2000: The small crew begins shooting on May 29.
Release and beyond: Globe plans for a June 28 release. The campaign tells audiences the film is something different from David Caesar, known via television appearances, and rings true about life outside the big cities. Axiom decides to include Mullet among its Cannes premieres. The film earns 21 over $1 million at the Australian box office. Following Mullet, David Caesar continues his work in television and writes Dirty Deeds.
Lantana (2001)
Writer: Andrew Bovell; Director: Ray Lawrence; Producer: Jan Chapman
1996: Writer Andrew Bovell’s stage play Speaking in Tongues opens in Sydney. In the audience are producer Jan Chapman (The Piano) and director Ray Lawrence (Bliss). Lawrence tells Bovell he can see a film in the play. Chapman is not convinced. Lawrence commissions Bovell to write a treatment. “The play was very theatrical, especially as you had the same actors playing different parts,” says Chapman. “But when I read the treatment I saw there could be real psychological depth in the relationships.”
1997–1998: Chapman applies to the NSWFTO for script development funding and it subsequently pays for three drafts – in reality more than 10 are written – over three years, starting in 1998. “We talked at least weekly and met every month or so,” says Chapman, referring to the trio. The play is restructured, and characters dropped, added and reinvented. A detective becomes pivotal but it remains an ensemble piece.
1999: Chapman sends the script to numerous US, UK and French sales companies. She expects a commitment from one plus presales to trigger FFC funds. She gets some of her best script responses ever and is perplexed by the companies’ hesitation to commit. Beyond International Managing Director Mikael Borglund takes on an executive producer role. He and Chapman meet with representatives of German film production fund MBP mid-year when they are in Australia. MBP agrees to provide development money, giving it first option on the film. Chapman is aware the finance still has to be raised and, with a March 2000 shoot date in mind, continues exploring options.
2000: MBP Medien AG, a public company associated with MBP, raises money through a private share placement, in which Beyond participates. The FFC board approves investment in April, with Beyond as sales agent and sharing local distribution with Palace. Chapman likes the fact that Palace has a cinema division and admires its handling of Head On. Regular Australian film supporter Fandango buys Italian rights during Cannes. The FFC's production and investment agreement is signed in June, with MBP agreeing to provide 60 percent of the A$6.5 million budget, but a cashflow delay pushes preproduction into September. Most of the cast are signed by then but a key actress pulls out late in planning. Barbara Hershey steps in just before shooting starts in late October.
Release and beyond: Lantana opens the Sydney Film Festival in June 2001, and is voted most popular film in Melbourne's festival in August. It is selected for Telluride and San Sebastian, and as Toronto's closing night gala presentation. Palace Films and Beyond plan a 12-print release on October 4, expanding to 40 two weeks later. “We sense it will initially feel like a specialised title but know it has broader potential through word of mouth and reviews,” says Palace general manager Tait Brady. The film goes on to make over $12 million at the Australian box office. It is awarded seven AFI awards including best film and received a Special Mention for Excellence in Filmmaking at the 2001 US National Board of Review. Ray Lawrence goes on to direct the Australian film Jindabyne and writer Andrew Bovell is working on a project in the US.
Source: George, S. in ‘Development of feature films in Australia: A survey of producers, directors and writers.’ Australian Film Commission, May 2004.
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