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| Thursday
November 20th, 2003 |
| ETHAN
HAWKE BEGS HIS FANS FOR MONEY |
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It took film director Keith Gordon nine years to piece together the funding for his 2000 film "Waking the Dead".
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The experience persuaded him to try a new approach for his next project - ask movie fans for the money.
Civilian Capital Inc. an online brokerage, is underwriting an initial public offering to finance Gordon's next movie, "Billy Dead". It's a dark tale of childhood violence and sexual abuse which is to star Ethan Hawke.
Investors can read the first chapter of the book and part of the screenplay on the company's Web site but will not have voting control of the company nor a voice in casting the movie or approving script changes.
The goal of the IPO is to raise $7.9 million by selling 900,000 preferred shares in "Billy Dead Inc." at the IPO price of $8.75 per share. The shares will be traded on the Nasdaq Over the Counter market.
"It's a joke that I've become a professional fund-raiser who directs as a hobby," Gordon said Wednesday during a news conference. "Independent films are breaking out of the system, so why shouldn't the financing as well?"
Film financing for movies outside big-budget action thrillers or sequels has always been hard to come by. German tax shelters have been one source for smaller films, and banks occasionally provide money.
More often than not, money is raised a little at a time from a variety of sources and often involves deferring payment to directors, actors and other principles until the film turns a profit.
Wealthy investors have funded films in the past by using limited partnerships - funds that invest in a pool of movies. Silver Screen Partners raised millions in four such offerings during the 1990s to fund such films as "Tin Men," and "Down and Out in Beverly Hills."
But rarely, if ever, has money been raised on the open stock market to fund just one movie which, according to a prospectus, may not get made, may not find a distributor and, of course, may not make a dime.
"It's all very pie in the sky and very risky," said David Miller, a financial analyst who covers the entertainment industry. He had not read the prospectus. "They're basically pegging the value of the shares based on future events with no historical record of success other than the fact that Ethan Hawke has a fairly accomplished resume."
If the film makes money from domestic box office, home video sales, domestic television licensing, international sales and other sources, preferred shareholders will be paid $8.75 per share. About 37.5 percent of the remaining cash would be paid as contingent compensation to Hawke, Gordon, and other participants.
Whatever cash is left will be distributed mostly to preferred shareholders, with 20 percent going to a smaller group of common stock owners.
The company's backers say they're trying to minimize the risk.
"These types of movies have shown to achieve a level of profitability beyond even the biggest studio films," said Peter Furhman, Billy Dead Inc.'s chief executive.
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| "Not
trying to be heavy man ... but you WILL invest in my
movie" |
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