Luke Randolph: «Three concerns are usually encountered in working in Central and Eastern European countries»

Luke Randolph, Managing Director Completion Guarantor, International Film Guarantors Ltd (Great Britain) is coming with a unique Master class to the «Film Business in Ukraine». He will tell the participants of the conference about international film finance models, creation & measures of value, finance versus investment, different types of finance, risk management, return of investment, how does a producer deal with all this. In exclusive interview he answered to some of our questions. 

What will be the main idea of your speech? What would you prefer to share Ukrainian and  Russian production companies and broadcasters with?
“Film Finance – the Anglo-American Paradigm”, in which I will cover the following headings:-
Film finance is not an investment
Evaluating your project – what is it worth, can you make it for less
Sales and distribution – fundamental commercial appraisal
Typical mixed finance structure – equity, mezzanine, gap, presales, subsidy
Co-Productions – Ukraine and rest of Europe
Risk mitigation – good script, high quality director/cast, professional crews, realisable within resources, completion bonds

Tell please in short about the greatest achievements of your company recently?
International Film Guarantors is a leading Completion Bond company, offering Completion Guarantees to a wide range of independently financed films with budgets ranging from $2.5 to $200m throughout the world.  Our principal office is in Los Angeles and I am the Managing Director of the London office covering Western Europe, Eastern/Central Europe, Africa, India and some of the Far East.  We have been in business since 1990 and are a wholly owned subsidiary of Firemans Fund Insurance Company, a $15bn company with an A rating from several leading credit rating agencies, and whose ultimate parent is Allianz S.A. In Germany.

What should production company do to get a completion guaranty (is script and financial plan quite enough)?
This is a big question which I hope to touch on during my presentation.  Initially we need to see the following:-
Shooting Script – scene numbered and page numbered in conventional format
Shooting Schedule – using the same scene numbers as above
Post-Production Schedule – showing initially 4 key dates, director’s cut, picture lock, start of mix, end of mix
Detailed Production Budget
Cashflow – can come later
Finance Plan – showing the intended beneficiaries of the completion guarantee, the financiers and the sales/distribution parties
Letters of Intent/Term Sheets – showing bona fide commitment from financiers
Delivery Schedule – showing all materials that must be delivered to each sales/distribution party
Heads of Department – CVs for the, producer(s), director and main crew
Cast List – with names of any known principal cast

What are the main sources of investing film projects now? How can companies economize on filming, and how can they get additional funding (if the production budget is not enough for the project completion)?

Too long – this is a big discussion that could take several hours - and the rest of our lives!

Did you cooperate with Russian\ Ukrainian\ Kazakhstan companies?
We have with Russian, but not yet with Ukrainian and Kazakhstan.

You have experience of working with Central and East Europe countries. What peculiarities has this region comparing with Western  Europe and North America?
We’ve worked in Russia, Romania, Hungary, Czech Republic, Serbia that I can remember. The three significant differences from Western Europe and North America are
1) That commercial law and corporate governance are very much less reliable in Central/Eastern Europe than we are used to
2) Production management is generally weaker with people being less prepared to take initiative and communicate problems until confronted with their consequences
3) Unreliable book-keeping and financial accounting
These are broad generalisations – each film has its own issues, but these three concerns are usually encountered in working in Central and Eastern European countries.

Why western production and distribution industry is becoming more interested in the CIS-region (your personal opinion)?
I think there are two valuable commodities which Eastern/Central Europe has – stories and money! - which Western producers are keen to engage with

What is your impression of the idea of launching big industrial media forum in Ukraine?
I know almost nothing about Ukraine, apart from the Great Gates of Kyiv, but it is a large and sophisticated country that should continue to make progress towards establishing as strong new relationships with Western Europe and America as it had with its previous Soviet partners.  So the forum is a great idea to bring people together as an introduction to working together.  I hope I am among those who manage to do so.