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UNREVISED PROOF COPY Ev 1 HOUSE of LORDS MINUTES of EVIDENCE TAKEN BEFORE the SELECT COMMITTEE on COMMUNICATIONS UK FILM AND

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UNREVISED PROOF COPY Ev 1 HOUSE of LORDS MINUTES of EVIDENCE TAKEN BEFORE the SELECT COMMITTEE on COMMUNICATIONS UK FILM AND UNREVISED PROOF COPY Ev 1 HOUSE OF LORDS MINUTES OF EVIDENCE TAKEN BEFORE THE SELECT COMMITTEE ON COMMUNICATIONS UK FILM AND TELEVISION INDUSTRIES WEDNESDAY 18 MARCH 2009 MS TESSA ROSS and MR PAUL GRINDEY Evidence heard in Public Questions 1 - 73 USE OF THE TRANSCRIPT 1. This is an uncorrected and unpublished transcript of evidence taken in public and reported to the House. 2. The transcript is not yet an approved formal record of these proceedings. Any public use of, or reference to, the contents should make clear that neither Members nor witnesses have had the opportunity to correct the record. If in doubt as to the propriety of using the transcript, please contact the Clerk to the Committee. 3. Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Clerk to the Committee. 4. Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee. 5. Transcribed by the Official Shorthand Writers to the Houses of Parliament: W B Gurney & Sons LLP, Hope House, 45 Great Peter Street, London, SW1P 3LT Telephone Number: 020 7233 1935 WEDNESDAY 18 MARCH 2009 ________________ Present Bonham-Carter of Yarnbury, B Eccles of Moulton, B Fowler, L (Chairman) Hastings of Scarisbrick, L Howe of Idlicote, B Inglewood, L King of Bridgwater, L Macdonald of Tradeston, L Manchester, Bp Maxton, L McIntosh of Hudnall, B ________________ Witnesses: Ms Tessa Ross, Controller of Films and Drama, and Mr Paul Grindey, Head of Business Affairs, Scripted Content, Channel 4, examined. Q1 Chairman: Thank you very much for coming; welcome. This is the first meeting of a new inquiry on the British film and television industries and basically what the inquiry is about is we are trying to focus on how the film and broadcasting industries are supporting the United Kingdom economy, including jobs, promoting UK culture and talent, whether there is scope for them to make a greater contribution and, basically, what more can be done by government and other parties to help. That is the very broad remit that we have got and it seemed entirely appropriate that Film4 should give the first evidence following your great success with Slumdog Millionaire on which we very much congratulate you. Perhaps I could start and, just to get us focused and taking, perhaps, Slumdog Millionaire as an example, could you take us briefly through the process by which the story actually reached the screen and obviously the part that Film4 played in this. Ms Ross: Thank you very much, it is lovely to meet you all. I take some credit for starting Slumdog Millionaire off. Film4, which I am sure we will go on to discuss later, spends quite 2 a large percentage of its budget developing projects, most of which we develop in conjunction with production companies and producers, but we also seek out material and ideas wherever possible. In this instance a very talented book scout whom we worked with and my head of development called me urgently and said “We have just come across the most wonderful manuscript, will you read it now?” which I did. I very quickly met the agent, having falling in love with the material, which was yet to be published, and we agreed an option on the material which was actually granted us because of what we had previously done. The agent and the writer of the book, Vikas Swarup, understood that Film4 stood for innovation and ambition and had previously been involved in films by, for example, Vira Nair who had done Salaam Bombay – just as an example of how they understood where we might be prepared to go with the development and production of the film to be made. I obviously have a huge number of relationships with writers and directors and one of these was Simon Beaufoy, to whom I pitched the novel very early on and said “You will love this”, which he did, but needed to obviously go and discover the country and how he might tell the story in India. Film4 was in the fortunate position of being able to send him as part of the development process to India to learn about the country and to see how he might incorporate the plot of the book into a screenplay. After a couple of drafts he asked me the question, “Do I get the rights to the game Who Wants to be a Millionaire or do I have to make up my own game?” I had previously worked with Christian Colson who was currently running Celador Films and said to him “I have a screenplay that I love and I have a problem I would like you to help with”, to which, having read the screenplay, he replied, “I absolutely love the screenplay, I would like to produce it for you and I can help you clear the rights to the game.” Q2 Chairman: He was the producer. Ms Ross: He became the producer. 3 Q3 Chairman: We have gone now from the stage where you have got the book, you have now in a sense handed it on to the producer. Ms Ross: Yes, and we then agreed a deal with Celador Productions to co-finance the film with Film4 and to clear the rights to the game, and we both then agreed that Danny Boyle was our first choice director and the story goes from there really to what you have today, which is really the vision of a brilliant writer, an extremely talented producer and a visionary director. Q4 Chairman: Just so we are clear, you originated the whole project. What is the stake that Film4 actually has in the film? Ms Ross: Apart from the early stages of development we then agreed with Celador, who were fortunate enough to have their own capital to invest in film production, that we together with them would co-finance the film, and because our budget at the time was limited to £10 million a year it was important for us --- Q5 Chairman: For all films. Ms Ross: For all films – for us to invest that money across a number of films; it would be foolish for us to finance two, say, with that investment. Celador were actually prepared to risk a lot more than we were, given that they were happy to make two films a year, probably, so our investment capped at £1.5 million and Celador invested the rest and together we were able to green-light the film. The film was effectively in pre-production before any other third parties came in to play. Q6 Chairman: That presumably also meant that on the basis you had only put in £1.5 million and they put in £8 million the profit on the film goes to the production company, or the massive profit goes to the production company, is that right? 4 Ms Ross: My Head of Business Affairs, Paul Grindey, will explain this, but just very broadly it is absolutely proportionately fair, but because our investment represents both licence fee, i.e. the rights to play the film on television, and equity – which is what you would call the risk money, the gambling money – we make the proportion of gambling money back, plus whatever profit we are due. But of course the distributors in this case will make the profit, or a large proportion of the profit. Would you like to take over? Mr Grindey: Yes. The way to make money in film is either to invest huge amounts of equity into production so you can dominate the profit plans or you own the distribution machine that takes the DVD sales, the box office receipts directly from the consumer. In the case of Slumdog it will be the worldwide distributors who make the most money, but Celador will still, as the majority financier, also make a very handsome return, as will we, but our return has to be set against the limited equity investment we were able to make in the film in the first place. Whilst it is a nice balance sheet item it is not something that transforms our prospects going forward. Q7 Chairman: The real profit-maker out of all this has been the distributor, has it, or will be the distributor? Mr Grindey: The distributor and Celador as well. Generally the film ecology – and I am sorry for using words like that, I know I am not supposed to any more – benefits as a whole from a film such as this. Not only are there benefits for the companies that are actually involved in distributing, marketing and selling the film, there is also a general perception of what is now possible in terms of independent film-making, a British film that was shot overseas and also has huge critical and award success in America. That will change audience attitudes to that kind of film and you may find in the future that US distributors are more receptive to this kind of film-making than previously. 5 Ms Ross: The important thing for as well was that the American distributor in this instance bought the film having seen it, so the issue is that where we are in early and in order for us to be able to spread our risk across a number of films, we want to stand by talent and projects early on in cases where, for the most part the market, i.e. the distribution market, will not see the value and the risk early on.
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