Warren Kohler is an independent film producer, with credits such as Cover and The Shrink Is In. He also has associate producer credits on Kissing a Fool and Do Me a Favor. Kohler is currently co-owner of What Exit Films with partner, actor, William Baldwin. They focus on producing feature films for distributions to secondary markets. Although, Kohler had a couple of challenging experiences that he shared with me, the one that stood out the most was the one on his second production. While producing his second film, one of the investors that were supposed to provide equity funding for half of the production, backed out at the last minute. Kohler had to secure debt-gap financing from an entertainment bank, all of which needed to close within thirty days. He said it was an extremely tedious experience, however it required a 24/7 attitude to make it happen. Having a great can do attitude helps you close deals when everything is on the line. Kohler’s focus and attitude helped him close that deal a week before principal photography ended. The end result was the movie was completed on time and budget and ultimately was purchased and released on 1735 screens by a major studio.
Going into any negotiation, you have to set your personal parameters. Kohler said he usually makes a list of everything he is trying to get out of the negotiation, most importantly positioning and setting precedence for future deals. Among this list, is everything he wants to get out of the overall deal and everything that he knows he probably won’t get out of the deal. He usually starts with the list that he knows he is not going to get first. Kohler states, “every deal you do in the industry should be followed by the next with an even greater deal.” A producer should always ensure they set the bar for the next level.
Now days, although Kohler has an attorney that negotiates producer’s agreements with the studios on his behalf, he continues to play an active role in the negotiations by laying out the parameters in advance. Kohler says, negotiations need to always be friendly as possible, because the investors and the executives at the studio won’t forget how things were handled during production. Precedence is everything in the entertainment industry.
Negotiations can get really tricky when separating the people from the problem. Kohler says, while producing a film, if investors back out of a project, it puts a producer in a tough position. When that happens it almost always puts the producer at an extreme disadvantage when negotiating replacement funding and is at the mercy of the banks and/or equity investors. In cases like this the bank, will usually elevate the cost of funds by increasing loan fees and interest and they have been known to seek an adjusted net profit participation. When structuring and negotiating deals such as this, Kohler says, stay as firm and strong as possible and don’t give in too easy. Eventually, you have to give in, but don’t make it easy.
When it comes to mutual benefit, Kohler says, it is best to get very familiar with the operating structure of the various unions such as SAG, DGA, Teamsters and most importantly fully understand the rules and regulations, otherwise the production and incur fines for not being in compliance. During production you must set the tone of the production office and promote a “No Drama” environment and allow the people you hire to do what they excel at.
One lesson learned is that if you want the cooperation from the Teamsters for example to secure favorable hiring of their members, meet with them at their headquarters and layout your budgetary needs. Most importantly work with them without whining and complaining about rates. That is not the way to negotiate or befriend them. He said knowledge, a positive attitude, and a great personality is the key to successfully working with agents, managers, unions, and crew.
When it comes to banking interest and loans, Kohler says there is a set formula in the entertainment world. The interest is usually set at prime plus. You can negotiate and fight the plus percentage, but unfortunately it’s impossible to negotiate the prime, but it never hurts to ask. At the end of the day the interest is going to be the interest
Once the interest rates are set you can focus on negotiating the loan fees, which is where the producer (based upon Kohler’s experience) has more of an opportunity to drastically reduce through hard fought negotiations.
Interview Retrieved: March 7, 2014 with Warren Kohler.
Hollywood, Bollywood, Nollywood: Business Careers In The Film Industry, Keying In, The Newsletter of the National Business Educational Association. January 2014.