556: Investing in Movies?

Facebook

Google

Twitter

Podcast: Download

When it comes to investing, boring is good.

In fact, in most cases, boring is exactly what you want.

The fewer moving parts an investment has, the fewer ways it can break. You’re not relying on perfect timing, you’re not depending on some heroic execution, and you’re not sitting there hoping everything lines up just right. It just… works.

That’s why a lot of the stuff I like—cash-flowing real estate, simple structures, things with predictable outcomes—tends to look pretty unexciting on the surface. But over time, that’s where wealth is built.

But… boring rarely creates outsized wealth. The biggest wins almost always come from things that are the opposite of boring.

If you bought Bitcoin ten years ago and held it, that wasn’t a conservative decision. That was a bet. A bet on something with massive uncertainty that most people didn’t understand.

Same thing in Silicon Valley. Most startups fail. Everybody knows it. But the ones that work? They don’t just work—they hit so big that they make up for everything else.

And then there’s this other category of investments. Investments that you make not just because of the potential return—but because they’re interesting.

Because they give you access. Because they give you experiences. Because, frankly, they’re kind of fun.

Being able to say you’re a Hollywood film investor and you showed up at the premiere… maybe even made a cameo? That’s a different kind of return.

Is it the safest place to put money? Obviously not. But not everything in your portfolio has to be purely clinical either. Know the risk and decide if it’s worth it.

That’s what this week’s Wealth Formula Podcast is about. I sat down with Jeff Deverett, and we kept it pretty simple: film investing is high risk. Most of it doesn’t work.

But it’s also one of those areas where the upside, the structure, and frankly the experience itself can make it worth understanding—if you go in with your eyes open.

If nothing else, it’ll change the way you think about what you’re actually investing in… and why.

Watch on YouTube:

Listen on Apple Podcasts:

Listen on Spotify:

Transcript

Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at [email protected].

You can do, you know, a hundred or a thousand times return on investment. You know, everybody, the, the, the one that everybody talks about in our business is the Blair Witch Project. So that was a horror movie made, I dunno, 35 years ago for $60,000, and it did oh, about $120 million at the box office.

Welcome everybody. This is Buck Joffrey with the Wealth Formula Podcast. Coming to you from Montecito, California. Today we’re gonna talk a little bit about something different, which is investing in movies. You know, the thing is, when I think about investing, for the most part, I have a mantra, which is boring is good.

In fact, I would say in most cases, that boring. Is sort of ideal. It’s what you want. The fewer moving parts an investment has, uh, the fewer ways it can break. Uh, you’re not relying on perfect timing. You’re not depending on some heroic execution. You’re not sitting there hoping everything lines up just right.

It just works. And so the reality is that sometimes people get into, you know, situations where they invest in things. That are, for example, they’re startups or something like that, and they think that, you know, the returns look fantastic, but they don’t really consider the fact that a startup business or any sort of enterprise has substantial risk.

That’s just what happens. You big wins, you be losses, but warring is good. And that’s, um, why I like a lot of stuff that I typically like. I’m not saying there’s no risk, but real estate, for example. Multifamily real estate people gotta live somewhere. Self storage people gotta put stuff somewhere that’s not changing with ai, it’s um, just something that people have to do.

And that’s why those multiples are capitalization rates on those are lower compared to say, uh, you know, buying a, buying a mom and pop uh, business from somebody. But that’s the idea, is you’re essentially buying a lower low risk. You lower low return. And we lever that up. That’s conceptually what real estate is.

And while we do tend to, you know, get better returns, uh, in real estate over a long period of time than say, you know, some of the, uh, other traditional investments, you know, the biggest wins always come from the opposite of boring. Right. Okay. So let’s take for example Bitcoin 10 years ago. Right. Ooh, 2016.

This is right before I learned about it. Maybe, um, you know, I think I, I think I was probably around 2017, class of 2017, as they would say in Bitcoin terminology. And at that point you bought Bitcoin. Any, at least any sort of meaningful amounts. It was not a conservative decision, right? It was not a boring decision.

That was like an asymmetric type of bet. Bet on something with potentially massive upside, but also massive uncertainty that, you know, most people don’t understand it. But guess what? You know, people who took big bets, uh, in that era ended up with pretty substantially huge returns. Same thing goes for the typical Silicon Valley startup type situation, right?

Most of them fail. Everybody knows it. But the ones that work, they don’t just work. They, you know, they kick some serious butt unicorns. They make people excessively wealthy. And that’s why people do that. And that’s, that’s, that’s a different kind of investing where you literally. Investing small amounts and lots and lots of these companies and expect to lose everything on most, and one just pops enormously.

So that’s a different kind of thing. It’s asymmetric risk. Asymmetric risk stuff to point out. I don’t even think that Bitcoin at this point is that asymmetric. It’s funny because over 10 years it’s matured into something that is, I mean, what is it? There’s not a lot of moving parts to it. There’s a small amount of it.

I mean, ever gonna be 21 million Bitcoin and it’s basically like digital gold. So it’s kinda lost a lot of its, uh, serious risk side. I would say that there is potentially, you know, there’s a huge amount of volatility, but that’s, you know, that’s just something different. I, I don’t think that. Almost anybody who knows about it thinks that Bitcoin could possibly go to zero now.

And they thought that in, uh, you know, 10 years ago. Anyway, there’s another category of investing that we don’t really talk about much, but you know, that people don’t invest in just because of the potential return, but because they’re interesting, you know, because you get some access, you get some experiences, they’re kind of fun and.

One of those is like, say you are a Hollywood film investor, right? The so-called executive producer, and you get to show up to the premier, uh, maybe make a cameo in the movie. You know, that’s a different kind of return. You know, that’s a quality of life or experiential return. Is it the safest place to put money?

Obviously not. It’s not, but not everything in your portfolio has to be clinical. I always say to my kids, if you know the rules, you can break ’em. So you guys just know the rules. In this case, you gotta know the risk and decide if it’s worth it to you. And so that’s what this Week’s Wealth Formula podcast interview is about.

I sit down with a guy by the name of Jeff Det, who is, uh, you know, who’s, who’s focuses on this stuff. We keep it pretty simple. We talk about the upside structure, tax benefits, and the experience. It’s not the type of stuff we typically talk about, and that’s why we’re talking about it today. I think if nothing else, you’ll find it interesting and hopefully it gets your wheels turning.

We’ll have that conversation right after these messages. Hey everyone, if you haven’t done so, make sure you sign up for Investor Club. Investor Club is Wealth Formula’s private investment community. All you need to do is to go to wealthformula.com and sign up for free. And if you are an accredited investor, you’ll get an opportunity to quickly do some paperwork and meet one-on-one with me and get onboarded.

And once you do that, you get access to all sorts of. Potential private deal flow that you can only see if you’re part of the club. So join now. Join Investor club at wealthformula.com.

Wealth formula banking is an ingenious concept powered by whole life insurance, but instead of acting just as a safety net, the strategy supercharges your investments.

First, you create a personal financial reservoir that grows at a compounding interest rate much higher than any bank savings account. As your money accumulates, you borrow from your own. Bank to invest in other cash flowing investments. Here’s the key. Even though you’ve borrowed money at a simple interest rate, your insurance company keeps paying you compound interest on that money even though you’ve borrowed it.

At result, you make money in two places at the same time. That’s why your investments get supercharged. This isn’t a new technique. It’s a refined strategy used by some of the wealthiest families in history, and it uses century old rock solid insurance companies as its backbone. Turbocharge your investments.

Visit Wealthformulabanking.com. Again, that’s wealthformulabanking.com.

Welcome back to the show everyone. Today my guest on Wealth Formula podcast, Jeff Everett. Jeff started his career and in law before transitioning into the film industry where he is produced multiple independent films and built a reputation for structuring deals that bridge investors and filmmakers.

So, uh, what makes this conversation interesting as Jeff approaches film, not just as entertainment obviously, but as a financial asset. Jeff, welcome to the program.

Thank you for having me.

So, uh, Jeff, let’s, uh, just kind of talk a little bit how you got into this.

I started in law with the intention of becoming a movie producer.

So. My dad said to me, what do you want to do? I said, I want to be a movie producer. He said, okay, you should go get a law degree or a finance degree, like an MBA. So I said, okay, I’ll do both. So I got a finance degree in undergrad and a law degree in graduate school and with the intention of becoming a film producer because it, you know, he explained it’s all business and finance and legals, um, which was really good advice.

And, uh, but I, I did my first year in law, because you have to, I’m from formerly from Canada where you have to do this thing called an articling year, so like an apprenticeship year. Um, and then I transitioned right into the film industry. But, um, I went into distribution and I was doing a lot of film deals.

So I was dealing with a lot of financial components in the film business, all the, all the. Financial investment stuff was always in the film business. Got

it, got it. Generally speaking, when we, you know, people hear film investing, they assume it’s pretty speculative. What is your sort of overall sort of, um, you know, view on that?

Yeah, it’s, well, you know, high risk is the term I use. Um, so as, when I say have my own podcast, in my podcast, I always say, uh, 1% of indie films break even or make money. And the, and I explain it this way, so that makes it very high risk. 1% is super low, you know, rate of return. And so that’s super high risk.

But here’s, but I can make that sound a lot better by explaining why 1% is as it is. So let’s say there’s 10,000 films that get made in the United States every year, which is approximately correct narrative features, right? Not shorts, just like feature length, over 70 minutes. 50% of those films are terrible.

They’re unwatchable, they’re produced poorly, they’re out of focus, the sound is off. It’s basically people practicing how to make a film, but they made a film so they launch it. And so it counts as a film, but it’s not really entertainment value ’cause nobody’s gonna watch them ’cause they’re not produced well.

So right away, 50% of those go, you know, basically don’t get seen by anybody, even if they were for free. Nobody wants to watch ’em ’cause they don’t wanna waste their time. So now we’re down to 5,000. Of those 5,000, 4,000 of those films never get properly distributed. ’cause filmmakers are artists and they’re focused on making the films so they, you know, they make a good film.

So those 4,000 are good films. They’re watchable, they’re entertaining. But they don’t know how to navigate the complex world of distribution. They either don’t know how to get a distributor, they don’t know how to negotiate a proper distribution deal, whatever the case may be. They end up not getting distributed.

They sit on somebody’s shelf on a hard drive and just collect dust, which is a shame. 4,000 good films never get seen. Not because they’re good, not entertaining, it’s just ’cause they never get distributed. Right? So now we’re down to 1,800 of those films never get pro, they get distributed. So they get put on streaming platforms and you know, they’re accessible to audiences, but they do not get marketed, meaning nobody knows about them.

So let’s say your distributor puts you onto, say, a streaming platform like Tubi, which is a very big. A VOD advertising video on demand platform. Very popular, but there’s 60,000 films on that platform. So how’s anybody gonna know about your no name, no star driven, small indie feature? They’re not, unless you do marketing.

And no indie filmmaker ever tucks away funds to do marketing. They don’t wanna do marketing. It’s very difficult to do it. It’s expensive, you know, so they don’t do it. And hence their great film, which is available to an audience, got made well, got distributed well, never gets known, so it never gets seen.

So those don’t make any money. Now you’re left with 200 films, and of those 200 that were properly made, properly distributed, properly marketed, half of them are successful. So 50% of those, the films that do it properly, 50% of them are successful, which is actually a pretty good mm-hmm. Statistic, 50%. But when you look at the fact that a hundred, which is 50% of 200 overall against 10,000 that got made, you know, that’s 1%.

That’s why the statistics are so low. The reason it’s such a high risk business is not because the films don’t get made properly. I mean, half of them don’t. It’s because nobody knows how to navigate the business side of the industry. Filmmakers just are not interested in the distribution and marketing side.

It’s too, it’s, it’s, they’re, it’s not the artistic side that they’re excited about.

So what is the opportunity for retail investors in this type of, uh, world?

Um, so again, I specialize in indie films, which is, I’m gonna say low budget indie films. ’cause there are independent films. You know, at some point you could say Skydance, you know, that now bought Paramount was an indie film company.

They were making huge budget, you know, mission impossible films and stuff like that. But when I talking indie films, I’m talking films generally that are less than a million dollars. All right, so. If you’re looking at big budget Hollywood stuff, you’re ba basically you’re buying shares in public companies.

You know, you’re buying shares in Amazon or Netflix or Warner Brothers or whatever the case may be. Right. Um, so that’s how you would maybe invest there. Or once in a while, maybe a big investment opportunity comes in an individual film, but I don’t deal with that. I don’t talk, I don’t work in that world at all.

That’s big corporate, you know, um, investment banking world that I don’t do. Mm-hmm. Okay. So I specialize in low budget in the film finance, which is the angel world. It’s not even venture cap, it’s angel investing. It’s high risk angel investors who get excited about a project and would want to take a really big risk on financing it.

And most of the time what you’re really betting on is the filmmaker, not the film. You’re kind of betting on the jockey, not the horse, because the films are generally, they’re not star driven, so you can’t sell, you know, a star power, um, at that budget level. You can’t afford stars. Mm-hmm. Right. So they’re concept driven and it’s really.

You’re betting on the filmmaker knows how to really make, you know, a decent entertaining film and that they know enough about distribution to get at least get it in front of the right people so that it has a shot at getting distributed properly. So for investors who wanna get involved in this world, it’s definitely Angel Capital.

I mean, it’s interesting. It’s fine. You’re closer to the action, but it’s super high risk. Especially with filmmakers who don’t know how to navigate the business side. So that’s one of the things I help them with. I basically say, I’ll take care of your business side of your operation. You just focus on the artistic side.

Just make a darn good film and then we’ll give it the best shot at getting seen, which mitigates the risk for an investor a little bit. So when I teach film, like when I teach, like I teach film finance in in film school at San Diego State, as a matter of fact, it’s funny that, that we’re having this interview today because today, so I teach an advanced course in film financing, right?

And it ends with my students and they’re advanced students. There’s, this semester I only have six of them. You have to like really, really be advanced to take this course. I put them in front of a panel of real investors. So this afternoon in about three hours, they are about to present to six high net worth individuals.

Their, their film project. And we, the whole semester we spend building the deck talking about, you know, what to present, how to present it, and 90% of that deck is not the making of the film. It’s the selling of the film. It’s how after we make this great film, how are we who, who’s the audience? How are we gonna connect with that audience?

How we’re gonna get it distributed, how we’re gonna make it available, what the revenue forecasts are, what the return on investment’s gonna look like, what the risks are. So like anything, like if you looked at a real estate investment, that’s what you wanna see. You don’t need to know how they’re gonna build the building.

You need to know how they’re gonna sell the units, if it’s an, you know, a residential building or, or get the tenants in a, in a, in a warehouse or something. That’s the same with film. They need, the investors need to see how the film is going to get monetized. So that’s what the investment’s all about. Now, ironically, film students really don’t like to talk about that.

They like to talk about cinematography and directing and sound and lighting. So when I start talking about ROI, you know, return on investment, their head spin, when I start talking about tax credits, their eyes roll to the back of their head. This is what investors need to hear because they’re putting in their money and they need to know how they’re gonna get it back.

So like any business, the film business is a business if you treat it as a business. And that’s what, uh, so, you know, so somebody who wants to invest in this world, they’re probably gonna want to focus on. The monetization side of it. The distribution side, like, okay, we, we generally, a, a film investor, like an angel investor, it’s gonna check the box that the guy can make.

The filmmaker can make a good film. If you can’t say that, if you can’t, you don’t have the confidence that the filmmaker’s not gonna make a good film, then it’s over, it’s over before it even starts. All right, so the, the question you really have to ask is, can they sell the good film after they make it?

What’s their plan to sell it? What is their plan to get audience attention so that maybe they could go viral on social media, whatever they’re gonna do. That’s what you’re selling to an investor and that’s what an investor needs to focus on.

So let’s, you know, I mean, our audience is investors, so let’s, let’s talk a little bit about some of those things that you mentioned in terms of, you know, even the tax benefit.

You talked about, you know, some tax credits. You talked about, you know, some, some of the other advantages. Why don’t you tell us a little bit about that.

Yeah, so, so a lot of, there’s 28 states in the United States and several other, many countries around the world that, that want to, um, have filmmaking happen in their state or country.

Um, there’s, so they incentivize filmmakers to come and shoot in their state. We’ll just, just talk about the United States for, to start. So 28 states will give you an, a financial incentive to bring your production to their state to shoot there. So the reason they do that is like any other tax credit program, is to create employment for the people in their state and, you know, an economic stimulation, you’re spending a lot of money.

Now, obviously they want the big films, like they want the $250 million, you know, hail Mary films ’cause that they, they come and spend a t, you know, hundreds of millions of dollars. But they also want the low budget films. So they offer, you know, these programs to low budget indie filmmakers. ’cause it stimulates, you know, a low budget film will hire 30 people for a month and you know, spend seven or $800,000 in the states.

So if you get 50 of those, you know, in a year, it’s pretty good money. Right? And it employs a lot of people. So that’s why the states do these programs. The flip side is why would the filmmaker, so generally these programs are tax credits, right? There are other types of programs, but it’s generally a tax credit.

And the best type of tax credit for an indie filmmaker is either a refundable one or a rebate where they don’t have to use it to offset their tax payable, right? So they’re just gonna, if they qualify for the program and they spend the money, so basically the way the program works is they say, spend all your money in our state, hire our people, spend, you know.

Our hotels, our equipment, our rental cars, our food, everything. Just the more you spend, the more eligible you will be for tax credits. We call those qualified expenditures. So then they’ll say, and we’ll give you back, you know, there’s different programs, but I’ll say 25% of that we will give you back in the form of tax credit on all of the qualified expenditures that you.

After you’re finished, you do an audit, make they make sure that you spent it where you said you spent it, that type of thing. Okay, so let’s say you spend a million dollars, right? And it’s a 25% tax credit program. So you’re gonna get $250,000 in a tax credit Now. If you have business in that state and you are generating revenue and you have tax, you know, tax payable in that state, then you can offset your tax payable by that $250,000 tax credit.

But chances are you don’t. You’re low budget in filmmaker. So there’s different types of things that can happen. In some states they’re called transferable tax credits, where you can basically sell that credit. To another company that does have tax liability, and they’ll buy that credit at a discount.

Usually, you know, six or 7% discount, and you’ll pay a brokerage fee of two or 3%. So let’s say you discount it to 90%, so you’re gonna get 90, you’re gonna sell your credit, get 90% of it back. Some other company’s gonna get, you know, the value of whatever they discounted it and use it to offset their tax. So those are, those are transferable tax credits for indie filmmaker.

That’s the worst kind. ’cause now you’re giving up a 10% of your tax credit, right? So there’s also these refundable tax credits where basically if you can’t use it, then the state government will refund it to you in the form of a check. They’ll just basically write, you check for the amount, and then a rebate is basically when they say, you don’t even have to offset it against taxes, but just spend the money and we will.

Give you 25% of it back to you. So those are, those are great programs and indie filmmakers need to look at those. ’cause that’s 25% of your budget. Often it can be 30 or 35% depending on how you structure it and how much you spend. But you wanna, you don’t, you don’t wanna leave that money on the table. ’cause that’s like bonus money.

Now I treat that a lot of filmmakers, in my estimation, mistakenly treat it as financing to make their films, but it’s not truly financing it’s revenue. After the fact because first you have to finance your film and make your film and then you know, it takes about a year or so to get these credits back.

You have to do the audit process, everything and everything. So you’re gonna get the money back, say a year after you’ve made your film. So if you are depending on that money to make your film, you’re gonna run into a huge cash flow issue. Right? But if you’re gonna get it back afterwards. So I basically treat that as revenue.

So I say to my investors, the first and safest revenue will be the tax credit. Yeah. Like, we know we’re gonna get back $250,000. The only risk of that is that the state goes bankrupt and it generally doesn’t. All right. So. So as long as the state doesn’t go bankrupt and the program doesn’t fold or whatever, which it won’t, it’s never happened before, then that is guaranteed money from the state, which you’re filming it, right?

So I did that, you know, in various states, but, um, and so that you can say to your investors. At the very worst, you know, you guys put in a million dollars. At the very worst case scenario, you’re gonna get back 250,000. ’cause as long as we follow the rules, qualify for the tax credit and do da, da, da, yeah, we get back this money, we’ll give it to you.

So now we’ve mitigated the risk to 75%.

Yeah.

Mm-hmm. Now there’s other things you can do to lower that risk for an investor. So there’s two other things that I do all the time. Number one is I always take the first unit of my investment. So let’s say on a million dollar film, there’s 10 units of a hundred thousand dollars.

So I say to my investors, I’ll be the first unit. I will put in the first a hundred thousand to show skin in the game. Good faith, belief, and what I can do is I will, I will subordinate my a hundred thousand dollars to your 900,000. So you guys put in the other 900. If we only earn back 900, I’ll go last.

You’ll get your money in first position. I’ll take it in second position. Which shows very good faith on my part. Right? And it also, you know, mitigates the risk a little bit more for them if we’re short on the rece, on the revenue, right? So that’s number two. And then number three is even the worst film.

Like even if it’s a disaster and you make a terrible film, as long as you sort of know what you’re doing, then your revenue for, let’s say your revenue forecast on that million dollar film was gonna be $3 million in revenue. That’s like your conservative forecast going into it, right? But disaster strikes and nothing goes right and the film isn’t good and everything like that, as long as you know what you’re doing in distribution, the very worst case scenario in that case would probably be, you’re gonna get.

10% of that, you’re gonna get 10 cents on the dollar. So you’re gonna get $300,000. Like that would be like giving the way of the film away for free, almost as, and there’s places that they’re gonna take these films. Mm-hmm. And viewers are gonna watch ’em even, and unless it’s completely, unless it’s a total disaster.

But I’m talking about a viewable film. So there’s $300,000 also offset. So in this scenario, I’m saying. Two 50 in tax credits, 300 in revenue, that’s five 50, a hundred in producer deferral, you know, subordination six 50. So your real risk is only $350,000. And that’s when disaster strikes. That’s what it is.

As long as it’s managed properly. You have to have, you know, business people managing it. Those tax credits have to get processed on time and properly, and they’re not hard to do as long as you know what you’re doing. But a lot of filmmakers mess it up. Why? Because they’re not business people. They don’t know how to manage this stuff.

So I always say to filmmakers, you focus, you focus on, you know, what you like to do. Writing, directing all the artistic stuff, and then hook up and partner with somebody who likes to focus on the financial stuff and let them take care of it for you,

uh, in practice, you know, I’m just curious about your own experience.

When you do these things the right way, would you know, as you’ve outlined in distribution. I mean, what kind of track record have you had?

Pretty good. I’ve, I, I’ve made nine films. Only two of them have, have, have lost, well, they haven’t lost money yet ’cause one of them is still being distributed. The other one has was tip tricky because I knew it was gonna be tricky ’cause of the subject matter, but it was kind of my opus film and I made it and I only took in two other investors on that one.

And I said to them, look, this is gonna be a real high risk film because it’s, the subject matter is a little trickier than the other stuff. Mostly I deal with sports dramas, which are very easy to sell, and I already know who I’m gonna sell to before I make the movies. So I don’t, it used to be in the, when I first started doing this, I would’ve, what we call pre-sales, like I already pre-sold it to a TV station or to a, back then there weren’t even streaming networks when I first started, but you know, now technically you could try to sell it to a streaming network.

Like one film I pre-sold to Netflix before I actually made the film. So I knew the revenue stream before I even made it. And that’s obviously mitigates all the risk. Yeah, because it’s a safe deal. Um, but those don’t happen anymore. Presales generally don’t happen anymore. Um, once in a while, maybe for a filmmaker who’s super, super well seasoned and has, you know, great concept and, but, um, for the most part, you’re not gonna get a presale, so you can’t really offset that risk.

But I’ve been successful, not because I’m the greatest filmmaker, I think I’m a good filmmaker. I think I have, you know, I’m a creative, I have a good artistic eye. I know how to tell a story well, but I’m gonna say my success rate is because I know distribution. Mm-hmm. That’s really the, the, uh, my advantage is I just know where these films are gonna go.

Realistically how much to expect for them, how to collect, how to get the tax credits. So that’s stuff I navigate. I’m very comfortable with the business side. ’cause remember I come to this with a law degree in finance degree. I don’t come with a, with a film degree. Mm-hmm. Like my focus, although I have written and directed five of my feature films.

’cause I enjoy it creatively. My focus always is on the business side. Yeah.

What’s uh, what’s been the, you know, the best performing thing that you’ve had? What’s the story behind that?

Um, okay, so, ’cause I, the reason I said in terms of money is ’cause audience, you don’t know, like when you sell a, say a film to a big stream platform like Netflix.

They could have a hundred million views and you don’t know. You have no idea. ’cause they don’t share the viewership with you. Right. Um, money, I, I’d say the best return was about two and a half, like 250%. Mm-hmm. So two and a half times a 2.5% return. Um, that was a good one. That was a presale to go in with and it was, you know, it was.

A very generic sports film, so it, I, it had a real good chance of making its money back and I knew that going into it and y I’m involved in the world of distribution and so I knew where I was gonna sell it internationally. I, I basically, a lot of the films I make, I make them ’cause I know I can sell them.

Right. I also make ’em ’cause I like them artistically, but, but I, I, these days I will not make a film if I don’t see the sales path.

Yeah.

Ahead of time, not after the fact. Ahead of time.

It seems like this is like a potentially the type of thing that you may want investors to look in and more is the fund structure rather than.

By film? By film. Do you, do you see that a lot in this space?

Um, so a lot of indie filmmakers try to do that. They’ll do what we call a slate of films. Mm-hmm. So they’ll do say, you know, put together, say if we finance five, then you know, the odds are that, you know, two will be successful. One will break even, and two will fail.

But the successful ones will pay for the other one. Something like that. They sell it that way. Most investors don’t do that unless you’re a super, super well seasoned. Filmmaker with a great track record. I could probably get away with that right now, but most filmmakers are first time filmmakers, so investors usually say to them, okay, I like the idea, it’s a great idea, but why don’t we start with the first one and see how you do.

Or the first, you know? And then if we like the first one it does, okay, we’ll try a second one and then maybe we’ll do three more. Something like that, which makes sense to me as, as an investor, I would say the same thing. ’cause remember I said before, you’re betting on the filmmaker more so than the film.

Investors don’t know about films, and I’ve never in nine features. I’ve never had an investor read a script, ever. I don’t know how to read a script. A script has no dis description in it. It’s hard to read a script unless you are. A filmmaker who can envision it, right? Scripts actually don’t read that well because it’s mostly dialogue or, you know, action lines or something like that.

It’s not like reading a book. So investors, you almost don’t even want them to read the script. It’s a bit of a turnoff. So they’re really focusing on your ability. They’re, they’re gauging you as the filmmaker. Are you credible? Do you have enough experience? Are you artistic enough? Are you gonna make that great film?

But mostly are you gonna know what to do with it after you make it? That’s what, that’s what the investment is about, right? In in, in this world, in low budget Indy filmmaking. If you’re an investor and you’re listening to this, you better darn well trust that filmmaker that you’re investing in, because even if they have the greatest film idea, if they can’t execute, it’s worth nothing.

Right? You got so bet on the jockey, not the horse in this world.

What else do people who may have an interest in this? World of investing, what else should they know about?

Um, so most people who, who want to invest in the film business, it’s because they generally, in my, in, in my experience anyways, they generally are interested mm-hmm.

In the film business. And they generally secretly wanna make their own film. Yeah. So part of it is, you know, it film is sexy. It’s more sexy than stocks, you know, like, than real estate. Right. Because there’s things you can offer a film investor that you can’t offer, say, in a real estate investment. Right.

Like a cameo role. Like they can them or their family, their kids or something like that can maybe have, you know, they can all be in the background in a scene, in the background. And most of my investors usually are, ’cause I do sports films, so they’re always these stadium scenes or cheering scenes or whatever the camera pans by, they get seen, but they’re not doing anything other than cheering.

Right. It’s like any. That’s fun. It’s fun to come on set. It’s fun to say I was in a movie. You know, they watch that scene over and over and over again. Sure. That’s what they focus on, so at the very least, they got to be in a movie. Now, if they or their kids, or grandkids, whoever it is, are legitimate actors, then I let them audition for a role.

They have to audition ’cause we don’t want bad actors ruining the movie. And I say to them, you’re an investor. You don’t want a bad actor ruining the movie. I mean, there are some low budgeting filmmakers who sell roles to people like, gimme a hundred grand, I’ll let you be in the movie. You know? And you’ll be an investor as well.

I would never do that ’cause that would compromise the integrity of the film. All right, so there’s fun. It’s fun. The cameo. As an investor, they get to come on set. So even if they’re not in the movie, they’ll have lunch with the director, the stars, they’ll see the filming being done. It’s cool to go on a film set.

You know, a lot of people, you know, have never done it. They really like it a lot. Um, most investors will get some type of credit. It’ll either be a thank you credit or, you know, for a big investor they get an executive producer credit both on screen, on the film, and on IMDB. They can brag about to their friends.

Hey, I’m a film producer, you know, I’m an executive producer, blah, blah, blah. They love that type of thing. Um, we usually give them a, like, I usually do crew jackets, you know, for the production. So they’ll get one of those. It’s kind of cool. Um, they can also do, we do always do a premier red carpet screening, like a cast and crew screening, and I invite them, I give them as many tickets as they want, usually 15 to 20 tickets, and they invite their friends and it’s all formal black tie, you know, with, we put out the red carpet and the step and repeat and everything.

Take the pictures, make it look real Hollywood. And they get, you know, to show off to their friends that they’re a producer and I thank them on stage and usually have them stand up and people acknowledge them. So these are cool, fun things that they can, you know, and, and also if I, if it’s a film that’ll go into festivals, then I will.

If we get accepted to festivals, I’ll, I’ll get them tickets to the festival. I don’t pay for them to go to the festivals. Like if the festivals are all around the country or the world, if they want to go, they can go, but they can, you know, be ambassadors for the film. So these are all what I call the fun things.

These are the, these the fun stuff.

Yeah. And in some respects, it seems to me that without that, might as well probably not do it because from the standpoint of, you know, risk reward, you probably are, you’ll find other things that might, might do better. But if you’re really. It’s a vanity thing too, right? I mean, it, at the end of the day, it’s,

it’s a vanity thing for sure.

Yeah, for sure. It’s a vanity thing. Okay. But, but every once in a while in our business, we get something, I call it the Hollywood dream. Some people call it lightning in a bottle. Some people call it winning lottery. All right. Our industry, like most, like, unlike like some industries like tech and say bio.

But not, you know, you can do, you know, a hundred or a thousand times return on investment. You know, everybody, the, the, the one that everybody talks about in our business is the Blair Witch Project. So that was a horror movie made, I dunno, 35 years ago for $60,000 and it did, oh, about $120 million at the box office.

I mean, that was a gigantic crazy success. So people still talk about that. There’s all kinds of those, those happen every year or two in our business. Like a, Nora was the most recent one, the one that won the Academy Award last year. Film made for 6 million, got picked up, did $50 million in revenue, won the Academy Award.

So these things happen in our industry. They don’t happen frequently, but they happen once in a while. So sometimes you can get lucky and you know, the investors hoping that that will happen as the filmmaker is. And you know, there’s things you can do to try to help make it happen. But you can’t, you can’t make something go viral.

You can do lots of things to assist it to go viral, but it has to go viral organically.

Jeff, um, I wanna thank you so much for being on this show today. Where can people learn more about what you’re doing, potentially get involved?

So they, the, the best thing to do is, uh, you can email me. My email is [email protected].

Um, they should watch my podcast, which is Indie Filmmaking Truth and Reality, and it’s on wherever you watch or listen to podcasts or watch on YouTube. Um, but they all can also go to my website, which is called the Indie Film, indie Film Community. That is, that has all the information and consulting and that type of thing.

Yeah,

so that’s, if somebody’s interested in investing, I mean I can definitely connect them with lots and lots of projects that I have all vetted and or, you know, worked with and I’m usually the executive producer, producer on.

Interesting. Thanks so much for being on Jeff and uh, uh, good luck to you.

Okay, appreciate.

Thank you for inviting me, and, uh, have a good weekend.

You make a lot of money, but are still worried about retirement. Maybe you didn’t start earning until your thirties, now you’re trying to catch up. Meanwhile, you’ve got a mortgage, a private school to pay for, and you feel like you’re getting further and further behind.

Now, good news, if you need to catch up on retirement, check out a program put off by some of the oldest and most prestigious life insurance companies in the world. It’s called Wealth Accelerator, and it can help you amplify your returns quickly, protect your money from creditors and provide. Financial protection to your family if something happens to you.

The concepts here are used by some of the wealthiest families in the world, and there’s no reason why they can’t be used by you. Check it out for yourself by going to wealthformulabanking.com.

Welcome back to the show everyone, and, uh, hope you enjoyed it. Yeah, it’s, you know, it’s a different, it’s kind of interesting the way he, the perspective he gave that, yeah, these things almost never work, but a lot of them is operational, right?

So if you at least can take out. The risk of, you know, these be people not knowing what they’re doing and not knowing how to market something, uh, then you know, the risk is significantly less. And then obviously the mitigating factors of getting tax credits and all that. So, anyway, fascinating. Uh, area I certainly, uh, personally am not really the type to do this kind of thing ’cause I don’t really care about Mo, you know, being in a movie and being kind of cool and stuff.

But, but I don’t begrudge you if you do because you know, hey, why not? I mean, if you get to see yourself in a movie or something, that’s kind of cool. Right? And, um. Hey, why not? Something to brag about. That’s it for me. This week on Wealth Formula Podcast, this is Buck Joffrey sending off. If you wanna learn more, you can now get free access to our in-depth personal finance course featuring industry leaders like Tom Wheel Wright and Ken m.

Visit wealthformularoadmap.com.