MONDAY MORNING HOLLYWOOD
“This is fun job. It’s a fun business and if you do it well and if you have a little luck it can be a lucrative business,” says W2 Media’s President and CEO John Flock.
John began his career as a kid distributing newspapers. Now he’s a Hollywood player distributing movies and making dreams come true, including his own. John makes movies because it’s a need far more than a desire. His success seems to be a combination of constant homework, smart choices and a relentless quest for going after what he wants as a filmmaker while also staying tapped into just what the movie going audience is looking for. Starting with a career in Entertainment Law, John Flock finally found what he was looking for by leaving legal representation behind, jumping into film production and later distribution. In February of this year John put all of that experience and passion together with partners Warren Nimchuck and Warren Fergus, and they formed the distribution company W2 Media.
W2 MEDIA...
How did you come together with Warren Fergus and Warren Nimchuck to form W2 Media? I’ve known one of my team partners, Warren Nimchuck, probably since 2005. I worked with a company called Peace Arch Entertainment which was based in Toronto. We had an office here in LA. He did a lot of tax credit analysis for us when he was working for Price Waterhouse Cooper and had partnered with Warren Fergus on a number of movie financing deals which is how I met him.
The three of us were talking, probably in the fall of last year, about starting a new company to do what I had previously been doing at Peace Arch, but in a smaller environment which was better capitalized and where we really focused on three things; selling movies overseas, distributing movies in the United States, and financing our own movies and movies for other producers. I took the team that I had in Peace Arch in Los Angeles, left the company and set up W2.
What is the ultimate goal and the big picture for W2? We want to be one of the more competitive foreign sales companies in the business. Ideally we’re going to handle bigger pictures in the fifteen to thirty million dollar budget range. We’re going to sell the international rights to those movies and help put together the financing. Our goal is that they’re distributed by the major independent distributors in North America so while we take the foreign, our major distributor will handle the domestic.
What are you looking for in a movie in terms of taking it on for distribution? We’re getting involved at the packaging stage. We need to like the script and typically there will be a director attached. For us to be interested it generally needs to be a director of some repute. We’re not doing a lot of things with first time directors simply because it’s tough to sell them. We’re seeing those movies at Sundance and we’re buying them after they’re made, but we’re not really getting involved early in the financing of movies where there is a first or second time director attached. So we start with a script, a director of some experience and hopefully a positive reputation and best case is there is a certain level of star casting attached. If a star cast is not attached, but they are interested then we’re ok. We’ll try and push the project far enough along so it gains financial credibility and we can then help attach the cast.
How much do tax incentives factor in for W2? They factor in to the amount that we’d be willing to contribute toward the budget of the picture. Typically we’re at two levels. The $1.5 to $3 million range and the $10 to $25 million range. We have not done a lot of in between those two budget ranges simply because of how the financing works. On almost every picture we’re going to expect somewhere between 15 and 25 % of the budget to come from tax rebates.
I have a lot of experience in it and my two partners are experts in tax incentives. We have a pretty good handle on what the rebate situation is. They’re both Canadian so we’re really focused on Canada but they were also consulting on legislation in the United States. We’re pretty well versed everywhere in what the tax situation is and how to maximize those credits legitimately.
What the ability and willingness of the state of provincial government to pay has become important. Sometimes they cap the amount of money they’re willing to spend. We know the tax situation in the English speaking world pretty well. We’re going to expect somewhere between 15 and 25% of our budgets to come back in the form of tax credits and then we’re going to try and put up somewhere between 35 and 50 % of the budget in addition to the tax credits which will typically take the form of an advance against the international distribution rights, so we have the ability to fund somewhere between 60 and 70 % of the budgets of these films.
In the bigger films one of two things has to happen. First, someone else has to step in and fund the balance of it. More typically as an equity investment which will recoup out of the North American end of the picture. Or there has been a pre-sale of North American distribution rights. If there has been a pre-sale to a major independent distributor that’s an ideal scenario for us. That infrequently happens. What typically happens is that North America hasn’t been sold.
Will W2 be looking at television and feature documentary projects? We’re not that interested in feature documentaries. It’s a tough international market. We had some experience in my former company with television production, specifically The Tudors, that we did very well with. Once W2 is more established as a theatrical distributor and sales agent we want to get back into the TV business.
Where does W2 hope to be in ten years? I see a long life in this. I want us to be a competitive North American distributor and a major international sales company long before ten years from now. That’s where I’d like us to be.
JOHN FLOCK...
What was the first job you ever had?I was a paper boy for the Long Island Daily Press.
What made you pursue career in Hollywood? I was always interested in movies. I came out here to be an Entertainment Lawyer. I did that for about five years and I realized that I’d rather be a producer than represent producers so I stopped practicing law.
I was an independent producer for about ten years and then I worked with a friend of mine who had started a completion bond company for a couple of years. Later, I got involved with the company Peace Arch, which at the time was a very active low budget film production company. We gradually transitioned into a distribution company, which is really where my interest lies right now.
What is your favorite story from the trenches? I did a movie back in 1994 called Bullet. It starred Mickey Rourke, Tupac Shakur and Adrien Brody. We were filming one night under the Williamsburg Bridge in Brooklyn. I just remember coming down off the subway on the Williamsberg side of the bridge, seeing the whole set lit up and Adrian swinging from a crane with the subway going by as he’s trying to spray paint this wall for the scene in the movie. It was really cool.
What is your dream job? This one.
What do you do on a typical day off? I work. W2 is a new company and we’re starting out. There is a real opportunity to grow the business and that’s exciting. We’re a small and very committed group and it’s a lot of fun.
What advice do you have for aspiring filmmakers? It’s a very, very tough business to get into now. My advice is if you’re not completely committed to it from an artistic standpoint… making movies is just not an alternative to something else. You need to have to do this and it’s an extremely difficult thing to do. The environment right now is complex. If you’re not completely committed to getting your movie made this is no way to make a living. You’ve got to love it and once you love it it’s a great way to make a living if you can make a living.
What do you hope to be doing personally ten years from now? Running a very successful film distribution company.
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