Can low production budget effect a deal?

Just a bit worried at the moment. We have a couple of interested parties in our film but they do not know what the budget was - when my producer asked one how much they think, he estimated 3million. The truth is it was a no-budget production made for under 25k. When they find this out could it go for or against us?
 
Just a bit worried at the moment. We have a couple of interested parties in our film but they do not know what the budget was - when my producer asked one how much they think, he estimated 3million. The truth is it was a no-budget production made for under 25k. When they find this out could it go for or against us?

That is interesting. Usually buyers are very good at estimating the budgets of movies.

My guess is that it's either some weird negotiation tactic on their part, maybe they're trying to complement you for the quality of the movie, or they simply don't know what they're talking about.

Don't get me wrong, I'm not saying that your movie couldn't look awesome, it's just that usually when you are working with a $3M budget, you would be talking about big name actors and production value that would in most cases be better than with a no-budget production.

There is a big difference between $3M and $25k. Most industry people should be able to tell the difference.

You don't have to tell them your real budget, so if they think you spent millions on it, that should benefit you when you are negotiating with them about the selling price.

I'm assuming that you didn't pay full salary to everyone involved at this budget level?

If you want to calculate the "real" budget, figure out how much it would have cost if you had paid everyone their full salary, this includes the shooting, and post-production, editing time etc.
In other words you include your sweat equity in the budget.

If they really want to know the real budget, and if you want to, you can tell them the budget including sweat equity.
 
If you want to calculate the "real" budget, figure out how much it would have cost if you had paid everyone their full salary, this includes the shooting, and post-production, editing time etc.
In other words you include your sweat equity in the budget.

This is interesting. No, we managed to wrangle some pro TV stars of the past and present to do the movie for back-end deals. Same with crew. All our locations were free too. Frankly, I don't know how we pulled it off! But you're right, if we did pay for all those thing's (Including post which i handle most of myself) then we'd probably be around the million mark. I guess I just have a good producer.
 
If they really can't tell then I wouldn't be inclined to get too specific with it, as knowing it was that low might shift their offers down.

"Three million? Thanks - that's quite a complement. Believe it or not we did it for under two million!"
 
Yes that's the way we're playing it at the moment but I'm not too sure how it works when time comes to sign over the rights- will they want to see accounts first? Are we not obligated to show them? Or is it only after the deal is made can they look at our books?
 
Read Robert Rodriguez book 'Rebel without a Crew'

He went through the same thing. He spent 7k on his Mariachi and wanted the distributors to believe he spent a lot more. Seriously, read the book or at least the part concerning that issue, you'll learn a lot of practical stuff.
 
It's not so much the budget itself, as what it represents and therefore what the distributors will expect. If the distributors think your film had a $3m budget, they will expect it to have a commercial quality sound mix in at least 5.1 format. As soon as they discover your film does not have this, any deal they are offering you will either fall through or will have to be greatly modified, to take into account the substantial cost of a having to create a commercial quality 5.1 mix, essentially from scratch.

The example of El Mariachi is quite different to this scenario because the distributor knew before they started that they would have to spend a few hundred thousand creating a commercial sound mix.

On the one hand it's great that a distributor thinks your film cost more than 100 times what you actually spent but such a vast difference is going to cause a level of expectation which you won't be able to meet and will cause you significant problems.

G
 
Yeah Rodriguez, while lying on the actual budget didn't it make it sound a few millions. Make sure the budget you give is still realistic compared to what's still left to do.
 
The distributor who is talking of a limited theatrical release knows it's only a stereo mix and has his sound tech listening/watching now while he does the math. This guy we told we made it on "sub-one-million", those were my producers exact words. The other guy who estimated 3million, I don't know what my producer told him after that, I forgot to ask, they spoke on the phone.

But there is no way that I would lead people to believe that it is 3 million quids worth. I think sub-one-million is a good estimate if we had paid for everything.
 
The distributor who is talking of a limited theatrical release knows it's only a stereo mix and has his sound tech listening/watching now while he does the math. This guy we told we made it on "sub-one-million", those were my producers exact words. The other guy who estimated 3million, I don't know what my producer told him after that, I forgot to ask, they spoke on the phone.

But there is no way that I would lead people to believe that it is 3 million quids worth. I think sub-one-million is a good estimate if we had paid for everything.

This is actually very common.

Producers with $100k-$500k movies will answer when asked about their budget "We did it for just under a million" all the time. Of course, they never say how much under a million.
 
The example of El Mariachi is quite different to this scenario because the distributor knew before they started that they would have to spend a few hundred thousand creating a commercial sound mix.

Actually, not necessarily. It's true that the theatrical distributor knew that. But it's important to remember that was never his plan, and that came well past the point where he essentially had a bidding war going on over him (not the film) in Hollywood. The film was originally made to be sold directly to the spanish home video market, and was being sold as-is with the original audio mix. He took the same approach of asking what they thought his budget was and then agreeing that it was in the range they guessed, even though they were guessing ten times what he actually spent.
 
The distributor who is talking of a limited theatrical release knows it's only a stereo mix and has his sound tech listening/watching now while he does the math. This guy we told we made it on "sub-one-million", those were my producers exact words. The other guy who estimated 3million, I don't know what my producer told him after that, I forgot to ask, they spoke on the phone.

But there is no way that I would lead people to believe that it is 3 million quids worth. I think sub-one-million is a good estimate if we had paid for everything.

That clarifies the situation. I've said before on indietalk, that commercial films are never made with stereo soundtracks as stereo has never been a theatrical audio format. So a film with a stereo soundtrack should immediately scream to a distributor "no/lo budget". It's very strange the distributor thought your film had a $3m budget knowing that it did not have at least a 5.1 audio mix.

The film was originally made to be sold directly to the spanish home video market, and was being sold as-is with the original audio mix.

It is still a different scenario. El Mariachi was made over 20 years ago and the situation is very different today. 5.1 was barely invented in 1992 and stereo was the de facto commercial standard for TV and video. Today, 5.1 is the absolute minimum requirement for commercial films, even for films destined for TV broadcast rather than theatrical release. Films designed for commercial DVD release occasionally have stereo soundtracks but only extremely low or no budget films, the majority of commercial DVD/BluRay feature film releases, even those which were not originally released theatrically, have at least 5.1 soundtracks.

G
 
I remember hearing or reading somewhere that if someone asks what your budget was, to dodge the question. Ask them what they think it was and keep asking why they think that. Just keep talking about how great the film was, or how you wished you had more experience to fix some of the errors, etc.
 
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