MONEY
The film crisis
NICHOLAS DAVENPORT
THE quiet Heathian revolution goes on. At long last the government is withdrawing from the finance of film production. You may recall that one of the last Acts passed by the Labour government was to extend the powers of the National Film Finance Corporation to the end of 1980 and increase its advances by £5 million. Labour was always ready to throw away good public money to the lame ducks. Happily only £1 million was drawn—to repay the bank overdraft — before Labour fell. Subsequently £500,000 was advanced to secure bank facilities and now the Department of Trade and Industry have finally said that provided a consortium of private interests and the NFFC is willing to act as a film bank they will advance up to £1 million on condition that private interests put up £3 for every £1 from public funds. The new chairman of the NFFC, Mr Robert Clark of Hill Samuel, and its managing director Mr John Terry are optimistic enough to believe that such a film bank can be formed because, they say, they have devised a new method of financing by which the investors will be able to get repaid out of the gross instead of the net distributors' receipts.
But only British Lion and Anglo-EMI have so far agreed among the distributors. Prospectuses are going out this week to City houses and tycoons and even insurance companies inviting subscriptions in units of £50,000 to this highly speculative venture. I doubt whether the cunning old fish in the City will rise to such a curious looking bait. Having had some experience of film finance I would certainly swim away.
If this is to be the death of the NFFC no one is really more qualified to write the obituary notice than myself. I was one of the first members of the Board when it was formed by Mr Harold Wilson, then President of the Board of Trade, in 1946. I had been advocating the creation of a government-sponsored film bank because the British screen at that time was dominated by vulgar American films and the dollar charge for them was a grievous burden on the balance of payments. I had introduced Sir Alexander Korda to Mr
Wilson and Alex's eloquence, helped by his seductive Hungarian accent, had convinced the young minister that government support was necessary in the national interest. Unbeknown to me, however, Sir William Eady of the Treasury had decided on his own that British Lion was the proper instrument through which public money should be directed to independent British film producers. Now British Lion was controlled by Korda's private company London Films and when Sir Wilfred Eady decided that £3 million should be lent by the NFFC to British Lion (which was on the point of bankruptcy) I went to Alex and explained that such procedure would not commend itself to the British House of Commons. Alex was a great patriot and said that he would do anything I thought was proper. I suggested putting his controlling shares in British Lion into a trust and depositing them at the Treasury. He agreed but when I reported this wonderful gesture to Sir Wilfred Eady I was sharply told to forget it. Parliament, he said, would never accept ownership of a film producing company. In the end this is exactly what they had to accept. The £3 million loan was quickly lost, as I had feared, and British Lion was bust.
I retired from the board of the board of the NFFC in a matter of months, not being able to see eye to eye with its managing director James Laurie. I then formed a consortium of three independent film producers — Aegis Films it was called — but by the good grace of God we never made a film.
My experience of film finance began just before the war when I was involved in a syndicate which lost its entire investment in a film starring Pola Negri and directed by Dr Czinner, the husband of Elisabeth Bergner. Next I formed a syndicate among my unbelieving City friends to finance Pascal's production of Shaw's Pygmalion. No one else would trust him. It was a magnificent film starring Wendy Hiller as Eliza and Leslie Howard as Higgins, and it was a turning point in British film craft for it introduced Shaw and the idea of meaningful dialogue to British cinemagoers. My syndicate was handsomely paid
off and Pascal and I who owned the Pascal Film Company made £50,000 net. We put it
all into a production of Major Barbara and lost the lot. That was curious because Major Barbara was superbly acted by Wendy Hiller as Barbara, Robert Morley as Undershaft and the inimitable Rex Harrison as the Greek professor. But that is typical of film finance. Winners are followed by losers. Korda was a hit and miss producer; he made his big money not out of films but out of "deals." The only man I know who has consistently made money out of film production is John Woolf of Romulus Films. His last success was Oliver and now he is making a sure thriller—The Day of the Jackal—through his company, British and American Film Holdings.
The NFFC was never likely to make money out of film finance. It has been extremely lucky only to have lost £5/ million net and praise must be given to the management for its painstaking husbandry. Including the £3 million to the old British Lion it has advanced £281 million on 730 long films and 173 short and has secured repayments so far of £17/ million. It has certainly kept alive a British film industry of sorts but, as I have often said, its main success was in keeping alive producers who ought to have been dead. Many of its financings have brought discredit to the name of British filmcraft but some have been highly creditable and successful, such as Poor Cow and Ulysses. The main reason for its failure was that mostly mediocre producers, who could not easily get finance from the distributors, came to the Corporation. As the Board says in its last report : "In recent years . . . the most promising projects have tended to be presented for financing almost automatically to the major US companies and have generally passed the Corporation by because of its financial weakness." But not only because of its financial weakness. A committee of financial men and accountants is not a body likely to attract or spot good producers. It is the withdrawal of the American companies from film finance which is the immediate cause of the present crisis in British studios. According to Today's Cinema their finance of British films has fallen from £31 million in 1968 to only £13 million in 1970. But the underlying causes of film production losses are the steady decline in cinema audiences, the extravagant fees demanded by the stars and directors, the restrictive practices of the trade unions which drive up costs and the expensive distribution still dominated by the two big circuits who charge too much for exhibition. The new financing scheme of the NFFC may certainly help. Their report calls attention to the completion of Dylan Thomas's brilliant Under Milk Wood which was financed as to twothirds by the NFFC and as to bite-third by Hill Samuel without the aid V any distributor finance because Richard Burton, Elizabeth Taylor and Peter O'Toole agreed to give their services free in return for a share of the profits. Such a film cooperative deserves success. It was the same co-operative idea I had twenty-five years ago with Aegis Films but in the film industry the gestation of good ideas is elephantine.
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