Producer William Keenan was about to close a deal on a movie about the early years of Jesus Christ recently when all hell broke loose on Wall Street.
Despite a "built-in marketing angle" featuring arguably the world's most recognizable name, "The Aquarium Gospel" lost its $25 million in financing after a lender that previously committed to the project suddenly backed out.
"We were in the process of papering the deal when the economic crisis hit," said Keenan, who planned to shoot the movie in India. "Now, we're having to rethink our strategy."
So it goes for many producers in the independent film business. The credit crunch further squeezed many independent filmmakers, who were already struggling from a glut of films and a shortage of funds even before the global economy went into a tailspin last month.
While the major studios have long-term deals in place to co-finance their movies, independent producers aren't nearly so fortunate. Most of them do not have easy access to capital, and instead must cobble together a patchwork of financing to make one film at a time. That patchwork has become frayed as lenders cool on making loans to filmmakers and foreign buyers grapple with access to credit and depressed currencies.
"The entire ability of independent filmmakers to finance their films has been shaken dramatically," said Mark Damon, chief executive of Foresight Unlimited, a Los Angeles film production company, who produced the 2003 drama "Monster." "It just makes it very scary."
The upheaval in movie financing is sure to cast a pall this week at the American Film Market in Santa Monica, a major global market for independent filmmakers and distributors.
"I think the atmosphere will be pretty somber at AFM," said Stephen Prough, managing partner at Salem Partners, a Los Angeles investment bank that focuses on media and entertainment.
AFM Managing Director Jonathan Wolf said: "I can't sit on the eve of the show . . . and predict the level of business."
David Garrett, who heads the foreign sales arm of Summit Entertainment, which handled such films as "Michael Clayton" and "Nim's Island," predicts that there will be an industrywide shakeout.
"A lot of smaller production and independent sales companies are going to be hit very badly," he said.
