Wednesday, 14 May 2008

Hollywood Babble On & On #95: Forgetting the Basics...

According to some pretty accurate and popular sources (OK, Nikki Finke, I'm lazy) Hollywood, especially independent film financiers are suffering a bit of a cash crunch. First reports came of trouble with Capitol Films, and some of its productions being shut down by the Screen Actor's Guild over, ironically, a lack of capital, and now there's a controversy over unpaid residuals between the Director Guild of America (DGA) and The Weinstein Company (TWC).

Now students, take a moment to read those pieces.

I'll wait.

(Whistles, visits other sites, while waiting)

Okay, time's up.

Did you figure out the problem both company's seem to be facing?

Well, I know you're smart enough, but if I don't explain it myself, then I'll lose my status as a pontificating know it all. And if I can't be a pontificating know it all, then what's the point of this blog?

If these reports are accurate, the moral of this story is that in business, show
biz especially, one must never forget the basics.

Think about it in personal terms.

You have a house.

All houses have bills to pay. You know what I'm talking about mortgage/rent, groceries, phone, etc...

These are the basics, things that have to be handled or you will stuck living under an overpass and using a shoe-box for a toilet.

In both these situations it looks like the basics are not being handled. Commitments are being made when folks don't have the money to back them up, and seemingly basic administrative responsibilities are being pawned off to third parties that don't seem to be fulfilling those duties.

Now where does the self-fulfilling idiocy come in?

Well, think about it.

Hollywood, especially independent producers/distributors are having a harder and harder time to find investors for their productions. People are leery of getting their money involved in the great Hollywood money pit, and one of the reasons why is because many companies aren't taking care of the basics.

Making sure that all your ducks are in a row is an essential part of doing business. It's not rocket science, just common sense. Revenues come in, residuals go out, money is raised, then committed to a production, not the other way round.

Investors can understand if they lose their investment because the film fails at the box-office, there's always an element of risk in any business, it's just more dramatic and sudden in movies. However, that risk goes from dramatic to downright scary, when people think that the basics of business management aren't being covered.

And when you can't manage the basics, you might as well mark a nice spot under the overpass, and start looking for a nice sturdy shoe-box.

That's my two cents.

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