Penny-Wise and Pound-Swoonish : British Filmmakers Are Eager to Partake in Plan to Increase Funding for Movies

Every Saturday 12.5 million or so people tune into “The National Lottery Live” show on BBC TV to find out whether the seven numbered balls randomly spun out of a revolving machine will make them millionaires. The game of chance is now such an important part of family life that the lottery’s logo of fingers crossed for luck is recognized by more British children than any other corporate symbol.

Camelot, the consortium that runs the lottery, claims that last year’s annual sales of about $8.5 billion made it the biggest game of chance in the world. More than 90% of the adult population has at one time taken part by buying a lottery card.

For British filmmakers, though, the National Lottery represents more than a quick flutter. Just under 30% of sales generated by the National Lottery are given to five “good causes” chosen by Parliament.

The Arts Council of England, which is responsible for handing out lottery grants to the arts, has so far given more than $50 million of lottery funds toward the production costs of 65 films--most of which are unlikely to be seen outside Europe. The grants are rarely more than $1 million and usually represent between 10% and 15% of the movie’s total budget.

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Such amounts are pocket change in Hollywood. And the idea of using lottery funds to subsidize filmmaking probably wouldn’t be greeted with much enthusiasm in California, where lottery funds go to public education.

But there is great national pride attached to British films and a film industry that is perpetually scraping for money because it doesn’t have the advantage of a huge home market. So far there has been no opposition to lottery support for the industry. While some recipients of lottery money--such as Eton, a school for the very rich, and London’s Royal Opera House--have been criticized as elitist, British films are seen as deserving causes.

This is partly because British films are usually low-budget--the average film cost about $8.4 million in 1995--and British filmmakers have far fewer sources of finance to tap than in Hollywood. Small grants are available through the Arts Council and the British Film Institute, which is particularly supportive of noncommercial films and first-time directors. Derek Jarman, Mike Leigh and Peter Greenaway were all helped by the film institute early in their careers.

A new initiative aims to change this pattern of piecemeal funding and make larger sums of money available for filmmakers. The Arts Council will continue to distribute lottery money on an ad hoc basis to individual films, but it has sought applications for four commercial franchises that will be eligible for lottery funding over a five-year period. Although the final sum available depends on sales of lottery tickets, the total amount of cash could be between $243 million and $259 million (U.S.).

The successful franchise groups (to be announced May 15 at the Cannes International Film Festival) will be allowed to ask for lottery help in funding a range of films each year. The terms of the equity investment will be negotiated on a film-by-film basis but will rely on part of any profits being plowed back into new British films. Each franchise is likely to receive up to about $12.9 million funding in the first and second years and a slightly lower figure in later years.

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Charles Denton, former Head of the Drama Group at BBC TV and ex-chairman of the Producers’ Alliance for Cinema & Television, is chairman of the Lottery Film Advisory Panel. He believes the franchise scheme will make it easier for filmmakers to raise money because they will be offering a slate of productions over a longer period, rather than scrabbling around for money for a single venture.

“It will give the producer surety of financing,” Denton says. “Consistency is what is needed, so that investors don’t panic and worry that they’re going to lose their shirts.”

Denton believes that the franchise scheme could provide such a boost to film companies that it could double British filmmakers’ share of the world market.

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When bids for the franchises closed in mid-December, the Arts Council had received applications from 37 groups, including considerable interest from companies in Hollywood.

Working Title Films, whose successes include “Four Weddings and a Funeral,” “Fargo” and “Dead Man Walking,” is among the companies who have applied for a franchise, through a group called Double Negative. The other members are Revolution Films (which produced “Jude”) and The Jonescompany, headed by one of Britain’s most successful independent producers, Robert Jones, who worked on “The Usual Suspects” and “Sirens.” PolyGram Filmed Entertainment will provide third-party financing and guarantee worldwide distribution.

Eric Fellner, co-chairman of Working Title Films, believes the new franchise approach will make a big difference.

“Hopefully it will kick-start a substantial matching fund. If you’ve got 30% it’s easier to get the other 70%, and hopefully, that 70% would be money that isn’t normally invested in films--representing a whole new portfolio of film investment.”

Another well-known filmmaker, who asked not to be identified, has some doubts.

“The Hollywood majors will not even notice it. This kind of money isn’t going to be applied against the kind of films which the big studios distribute,” he says. “But the Hollywood independents are going to be thrilled--they’re going to see it as a way of getting a free 30% and thereby reducing their risk.”

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PolyGram, together with Channel Four Television and the BBC, is among the most successful, long-term backers of mainstream British films. “Four Weddings,” which cost $4 million to make and grossed $250 million at the box office, took 20% of its funding from Channel Four and the rest from PolyGram. Working Title is now part of the PolyGram empire, which has also invested in films such as “Carrington,” “Jude,” “Shallow Grave” and “Trainspotting”--in return for extensive international rights.

For many members of the British film industry, the only way forward is for the government to provide greater tax incentives and direct subsidies. Among the recommendations made in a government-commissioned report by Sir Peter Middleton’s Advisory Committee on Film Finance were 100% first-year tax write-offs for film production and the abolition of withholding tax on overseas film stars.

But Fellner says that the real issue may be one of content, rather than resources.

“Is the reason we’re not more successful because we don’t have enough money?” he asks. “Or are we not more successful in world terms because we don’t make mainstream movies? I would probably agree that we do have a high profile, but it’s never going to be that much higher, because we don’t make films like ‘Die Hard.’

“The talent is here, there’s quite a lot of money, but there’s very little confidence. Something like the lottery franchise scheme will hopefully instill a greater deal of confidence.”