Talking Finance with Michael Cerenzie
Interview by Online Editor and Film Critic Todd Konrad
Independent film producer Michael Cerenzie has been a busy man over the past year since our last conversation discussing his then-release Before The Devil Knows You’re Dead, hailed by many critics as one of the best films of the year yet ignored by the Academy Awards (their loss). Since then, Cerenzie has been busy traveling the world securing funding and strategic partnerships with other companies in order to ensure creative freedom. In light of Cerenzie’s amazing fundraising ability, I felt it would be appropriate to get his thoughts on the current economic downturn and its effect on the film industry itself, still reeling from the after effects of the WGA strike, current SAG troubles, and a general leveling off in income generally.
As before, Cerenzie is has a wealth of opinion and information to share, seeming to burst from him at a barely controllable pace. Rather than dwelling on present troubles, he has chosen to forge ahead and in doing so, may have the key in bypassing the funk the industry now finds itself in and come out even stronger than before. And to top it all off, current announced projects like a Jim Sheridan-directed Irish mob thriller and Steve McQueen biopic show that his taste has not diminished in all that money searching.
IFQ: Since we last spoke the film industry, along with practically everyone else, has been hit by the economic downturn. What are your thoughts on how the industry has responded in general to the credit crunch from your perspective?
Michael Cerenzie: Well, in general, I think if you spoke to the majority of producers out there or producers who also finance, which is becoming one thing these days, the role of the producer has changed dramatically to be more than just a content provider like in the past. You now have to be both a content producer and financier because the studio system has been changing so drastically under these circumstances that basically before we could put together great projects, develop them, bring them to the studios or whatever. These days you have to be bringing, at least my feeling is if we continue on this trend, not just a great package with a great director, actor, and script, you’re going to have to be bringing money to the table as well which is what we do probably ninety-five percent of the time.
But there has been a definite crunch on the economics of the film business, at the same time though I actually look at this market as a bull market, which some people look quizzically at me when I say that. But the reason I say that is if you look at the fact that most debt is dried up and most people took a big loss this year because of the drop in the NASDAQ market and their stock portfolios. On the other hand, people that normally would be investing in real estate, in funds, or stocks aren’t because they’re nervous about what’s going on there so there is a larger liquidity factor out there. Now, the whole thing is the film industry as a whole has proven to be quite recession-proof. I mean we’ve been up in the box office for the last several weeks between I think six and a half to ten percent from last year because people in this market look for escapism and cinema gives them that. It comes down to restructuring the financial model that you’re using though for people to be investing in film. The old models aren’t working so they aren’t able to raise money through the models that we’ve seen historically over the last decade or so.
And with the drying up of hedge funds and so forth, the banks cutting back on their film departments or actually eliminating them altogether you have to be coming up with new ways and models in getting people to invest into the film market itself. Our company, CP Productions, myself and Christine (Peters) have been busier than ever and more successful than ever actually because we saw the trends happening before they hit and took several steps to ensure that we would steer our way through that recession. To break that down in more specific terms, you know I’ve probably spent, since we spoke, in the last year most of my time in India, Japan, Abu Dhabi, Dubai, South Korea, China, raising equity and putting together different funds as well as acquiring IP libraries as well as investing in, incubating, and acquiring new technologies that are media related. Technology companies that have proven to be very successful that we’re launching this year, kind of creating more of a portfolio to our film fund so there’s more of a diversified income revenue coming in, in case one of them is going down, another one is going up at the same time.
On that hand, it’s been great and on the second hand we realized in the third or fourth quarter of last year that even though we had some of these amazing projects that we’ll talk about later on, we were getting this great response from Paramount and the rest of the studios who were saying “this is wonderful, we’d love to finance this”. However there really wasn’t money available for development. So what I realized was that it wasn’t really the third or fourth quarter, it was just that the studios are cutting back the amount of money that they’re spending on the development side. As we all know, the studios are becoming more and more attuned to distributing films, picking up finished product or going into co-financing arrangements with certain producers and not really wanting to spend the development money. So what we did at CP was actually raise two million dollars in the third or fourth quarter and basically acquired the properties ourselves, developed them ourselves, and paid for them. We’re starting to see the benefits of those in the releases that have been coming out recently and there will be a lot more announced in the next several weeks.
We’re in the midst of securing and finalizing a very large second phase for what I call our slush development fund which will probably be in the amount of somewhere between five to ten million dollars to keep acquiring properties and projects, which may not be projects we produce on our own. They may be co-productions with other talent companies, other director-driven companies, but we really feel that we can capture a larger space in the market by doing so. Because the production funding side, believe it or not, is much easier once you have for instance, a Jim Sheridan project with a great cast and script, it’s easier to find the money to finance that movie. So the seed money has become invaluable, the equity is available because I think we’ve created a great model for people to feel comfortable with on the equity side and have great relationships with several of the remaining double A-listed banks internationally that are doing our debt portions. So we’re in a very, very strong position for 2009-2010.
IFQ: I was curious to find out from you how the crunch was affecting you guys since I knew you were heavily into raising your own financing from our last conversation but it sounds like the diversification model you’ve come up with is pretty sound and able to dodge a lot of the trouble that’s come about since the crisis began.
MC: Yeah and also I think that the problems a lot of producers are having, and it’s no fault you just get stuck into a mentality. The mentality of being able to pick up a phone, call the studio, and say “hey, I got this project do you want to buy it?” I think those days, for the most part, are over unless it’s a very big tentpole or high-concept situation. Other than that, we’ve seen the close of a lot of mini-majors like Warner Independent and Picturehouse, cutbacks in the Paramount Vantage and Focus (Features) departments, etc.
IFQ: That leads me to wonder, now that you foresaw the limitations from the current financing model and were able to move forward past that and thus avoid the current crunch, what do you think will be the next frontier opening up in terms of raising capital beyond what you have put into place now?
MC: Well, we just opened offices in Tokyo, we plan on opening offices in Mumbai, Seoul, Hong Kong, etc. I’m originally Canadian, we’re looking at opening in Toronto and there are several reasons for those openings. One is we’re tapping into monies in those territories on a basic level; at the same time we’re looking at joint venturing and doing more co-production work with facilities that are already established in those individual territories, with studios that are in India, studios in Japan, in Seoul, Hong Kong, Toronto, etc. Giving them an outlet into Hollywood basically and putting a lot of work into creating those strategic alliances, building those relationships which not only bring financial equity/contributions we’re also looking for but the relationships of the studios based there and expanding more into those arenas where you could do a lot of great tech work at a lot lower cost than you’d be able to do in the United States itself.
That to me is a very big part of the future; when I started on this trek a year ago myself and my partner Christine Peters planned this out very strategically. A lot of people thought we were off but it’s ended up paying off in a very big way for the company and now we’re kind of in on the ground floor, which was the idea, to get in before other people tried. But at the same time, it’s very hard for most independent producers, producers with production deals, or even studios to get into those markets. For the larger studios, it’s hard because it costs so much and the payoff takes a long time. For most producers, more people think more along the lines of “I want to produce this movie or this movie or these three movies this year” or even a slate so they’re looking more at short-term goals. A lot of what we’ve done has great short term but it’s also built on a longer five, ten, fifteen, twenty-year format where we’re looking at having very long-lasting relationships. So we’ve invested a lot of time and money to do that because we think the future is going to be built on a more global aspect than just the United States, even though we always feel the US will be the largest exporter of media and entertainment in the world.
IFQ: I recently read that you’re teaming up with director Jim Sheridan on adapting the Irish Mob novel Black Mass: The True Story of an Unholy Alliance Between The FBI and The Irish Mob. Could you go into how that property came to your attention and why you decided to produce it into a film?
MC: Yeah I mean we’re doing a great project based on Black Mass, which is a book that Dick Lehr and Gerard O’Neill wrote. They won a Pulitzer (Prize) for their original article in The Boston Globe and then ended up being on the New York Times bestseller list. Jim Sheridan and Nye Heron are finishing up the screen play and Jim’s directing it, which we’re thrilled about. We’re looking at doing that in the summer, early fall, and we’ll probably be wrapped around fall next year. That’s a project that we’re very excited about.
IFQ: It’s a story and more specifically a book that I had known about for a while and was curious as to why no one had optioned it yet given its subject matter and a true story to top it off.
MC: It’s a great book, well I think what happened was a few people tried to make the book but I think it was the wrong time to make it. One, everyone was still running around loose (laughs), it would be like trying to make Goodfellas at the wrong time. Timing was one thing and secondly, I think people felt that when (Martin) Scorsese made The Departed, really The Departed was a remake of the Chinese film Internal Affairs and they basically placed in South Boston. I think people felt the book was too close to The Departed but it really has nothing to do with it. The story that we’re telling is very specific, true to form and really about Whitey Bulger being the biggest Irish gangster in South Boston and his brother Billy who, at the same time, was a Massachusetts state senator and their neighborhood friend John Connolly, who ended up being put in by Hoover into the FBI to turn Whitey into an informant to wipe out the Italian Mob in North Boston.
It’s a very specific story, as Jim would describe it it’s really an “anti-Godfather film” about the Irish code and about how Whitey disappeared fourteen years ago; he’s the second most wanted man on the FBI list after Osama bin Laden, and nobody’s been able to find him. His brother’s gone in front of congressional meetings and never told them where he is and John Connolly is doing forty years in prison for murder and he isn’t speaking. So it’s a very interesting story even though you’re dealing with a lot of anti-heroes; you’re dealing really about two gangs but the gangs aren’t the Irish and the Italians, the gangs in this case are the FBI and the Irish. It’s an interesting twist and Jim’s the perfect kind of director for this material. He’s done so well with films like In The Name of The Father and The Boxer, he understands the Irish sensibility in this probably better than any other filmmaker alive. We’re very thrilled about this and are excited to be working with him on it.
IFQ: In addition, you also have a project based on the life of movie icon Steve McQueen that was recently announced. Again could you describe the focus of that particular one, how it came to you, and what piqued your interest to produce it?
MC: It will be all-encompassing, he’s such a fascinating, fascinating character and the book that we optioned is an amazing novel. He really was I think the first, if not the last, real American rebel. He had an amazing life, died very young when he was in his fifties, and we’ve had an overwhelmingly tremendous response with A-list writers and actors. Eight or nine different A-list actors have had their agents call us and said “we want to play McQueen, we ARE McQueen” (laughs). We’ve narrowed it down to two or three people right now which, any one of them would be amazing to play the role actually. I think thing it’s going to be a very special film that myself, Christine, and our producing partner Brian Oliver, who actually brought us both those books. We’re excited to be partnered with him and these are two films I think are going to be very well-remembered in the film world.
IFQ: It sounds like they both have the potential to and given the subject matter, it would be pretty hard to screw those two up.
MC: You know, for me, after making Before The Devil Knows You’re Dead which was an amazing experience, I was really looking for something really special to follow up with in that kind of genre. These have much more mass appeal and broader but have a strong dramatic sense to them.
IFQ: You guys also though optioned the rights to remake a, I believe it’s Thai, horror series called Art of The Devil correct?
MC: Yes, Art of The Devil was a Thai horror picture that broke all box office records in Thailand and is something we felt would adapt well. We’ve been looking a lot in those pan-Asian areas because we want to remake stuff somewhat like what they did with Ringu which ended up being The Ring. We felt that with some repurposing for American audiences there would be some mass appeal for that as well.
IFQ: That leads me to ask what your targets are when going after intellectual properties, i.e. the types of material you go after and your criterion for judging what you feel may or may not be a good fit for you guys?
MC: What we’ve done is a few different things in that area, we’ve hired a lot of staff that is bilingual in several different languages in Japan, here, and South Korea for starters. We have these satellite offices and staff that communicate with each other, from both here in the US and on the ground there. We’ve also created a very wonderful strategic alliance with a company called Formula Entertainment out of Japan, they are very focused on identifying certain manga properties, remake properties, etc. with probably more of a focus on the South Korean and Japanese markets and we’ve had a very successful beginning with them. What’s really great about that is they really know their material, at the same time they have a very good eye at what would work in adapting for American audiences as well.
Something that we’re doing with Formula, which I think really hasn’t been done before and is very unique, is myself and Christine, under CP Productions, are actually producing with them Japanese and South Korean films in those countries and languages and they are producing them with us as English-language films too. It was an idea that I came up with Daisuku (the company president), he wanted us to bring American production and sensibility but yet still do the films in their original language form and we wanted his input and participation in some of the American films that we were doing. Some of those films that we’re going to be doing in Japan and South Korea will then be remade into American movies afterwards.
It’s interesting because that’s never really been done before and I took it as an interesting challenge to do and unique because everyone’s approach to film is different around the world. I’ve gotten to spend so much time in Japan, over the past five or six months, I’ve probably spent three or four months there and it’s an amazing culture as is South Korea and I think it’s just full of a great wealth that hasn’t been exploited in a good way. Again as we talked about earlier, it’s about being on the ground floor and doing things differently rather the typical fashion of someone just going in and buying a title because they saw the foreign version of it and then try to repurpose it for American audiences. This way you’re actually apart of the actual process from both sides and you have the team with you to do both.
IFQ: I would think that by doing it from the ground floor as you’d say, it allows a higher degree of quality control in that from a project’s inception you are able to develop such that it works well in its native language but be pliable enough to adapt to an American sensibility without having to screw around too much with it.
MC: Exactly, that’s really important and where most things go wrong actually (laughs). This way, we have each other as vetting sources as we go through the development and production stages so we are balancing these things off of each other in a good way so that the eye is on a much further ball down the road, but always on the day-to-day basis it’s been very collaborative and creatively fulfilling for both companies.
IFQ: Tying things in with our last conversation over a year ago when Devil was out, we talked about the next project you and Sidney Lumet are doing called Getting Out. How’s everything going on that? Any updates to share since then?
MC: Actually things are going great, he was doing a rewrite on the screenplay which I think he just finished up and we’re going to be hopefully meeting up within the next week or two and moving that forward. I’m definitely very excited to work with Sidney again.
IFQ: It finally seems like Sidney has someone who has his back because I watched Devil again recently and it looks like something in which he was just left alone to work and didn’t have some producer or studio getting in his way trying to change things up.
MC: Well you don’t want to get in his way because he’s such a master and I think the whole thing with producing people like Sidney Lumet, Jim Sheridan, and the likes of those kinds of filmmakers is knowing when to get out of the way. That’s something I think a lot of producers have a hard time doing and it’s the one thing you have to trust instinctually that you know when you bring those kinds of filmmakers on board at that point to you have to be laying off and handing over a lot of trust. And to quote Sidney from his own book, Making Movies, “hopefully we’re all making the same movie” and if you know you’re all making the same movie then it’s not very hard to do.
For more information on current Cerenzie productions, go to www.cpmotionpictures.com
*Photos Courtesy of Michael Cerenzie