by Lisa van der Pool
Boston Business Journal
July 17, 2009
Michael Bassick is hardly the only local businessman with the idea of bringing Hollywood filmmaking to Massachusetts. Except the former investment banker wants to bring not only the glittering star-studded shoots to the city, but also the behind-the-scenes funding that drives the industry. “There’s a sexiness to this that investors respond to differently,” said Bassick, 39.
In this economy — with film financing especially difficult — it may not be an easy sell. Bassick is attempting to raise a $100 million fund through his independent feature film investment firm MJB Ventures in Boston. The plan is to invest in films that will be shot in Boston, taking advantage of local talent — and the film tax credit.
Bassick wants to raise $50 million in equity and $50 million in debt. That debt will be secured mainly by the worldwide rights of the films, in the form of contracts that would allow the purchase of certain rights upon a film’s completion, according to Bassick. The life cycle of the fund will be about six years, investing in about 20 films with an average budget of $10 million.
MJB Ventures’ special sauce is that the firm leverages the Massachusetts’ state tax credit (which amounts to 25 cents for every dollar spent in the state) by monetizing those credits before film production starts in order to help finance part of film.
“It’s hard to pick hits,” Bassick said. “So the idea behind the fund is to create a portfolio, like a venture capitalist would. Some singles and doubles and hopefully one or two will be home runs.”
To ensure his chances are good of picking a box office winner, Bassick says he has a quantitative process through which he selects movie projects. The process includes taking a careful look at the script, actors and directors, the genre of the film and the potential value of the film rights.
Bassick is already established as a film financier and producer. In 2006 he started Markedia Worldwide LLC, a film investment and branded entertainment company, which has already committed $10 million across seven film projects since 2006.
Those films include the most recent, “Valediction” starring Eliza Dushku, a thriller that was filmed in locations across Boston last month, including Post Office Square and the InterContinental Hotel. Valediction is Bassick’s first role as a producer.
There’s money to be made if Bassick taps a winner. In 2008, domestic box office numbers hit $9.8 billion, up 1.7 percent over 2007, marking the highest total in history, according to the Motion Picture Association of America.
Although indie films make far less than studio blockbusters, independent films can score big. Indie flick “Juno,” which opened in 2007, grossed $112 million in 2008, according to the MPAA.
Indeed, many in Hollywood were shocked when Sony pulled the plug days before “Moneyball” was set to start filming last month, despite the fact that Brad Pitt was set to star. According to media reports, the film’s $57 million price tag was too much for an obscure movie.
Bassick says he has the financial chops to make his fund work. Back in 2003, Bassick left his job as a senior banker at FleetBoston to launch Markedia. Then, when the state’s film tax credit began in 2006, Bassick saw a fresh opportunity for investing in independent films.
Given that Massachusetts’ film industry is just now coming into its own, Bassick could be striking at just the right time, said Eran Lobel, president of Boston-based Element Productions Inc., who is on the board of the Massachusetts Production Coalition.
“To get a fund here is exactly what (the local industry) needs,” Lobel said.
“I think it’s great that somebody like Michael is stepping up to try to bring a financial metrics to this industry which is growing here,” said John MacNeil, owner of Waltham-based Moody Street Pictures and one of the founding members of the coalition.
Lisa van der Pool can be reached at firstname.lastname@example.org.