After securing the completion guarantee for the film, Murphy returned to his primary job, creating the shooting schedule, drafting storyboards and scene plates, communicating with the director of photography Phil-Lasher, the art director Helena-Espola, and analyzing characters with the confirmed actors Robert Downey Jr., Jessica Alba, Dwayne Johnson, and Gina Carano, as well as coordinating with Chen Hu for the design of action scenes.
These tasks kept Murphy extremely busy. The importance of early preparations is self-evident, with both the director and the producer being core to the process.
So far, the production team has received an initial investment of $5 million from Murphy's Stanton work and $10 million from 20th Century Fox, which, although only a quarter of the total production cost, is sufficient to ensure the smooth start of the preparatory work.
Moreover, after securing the completion guarantee from the American Friendly Insurance Company, 20th Century Fox's previously stalled financing efforts immediately saw a breakthrough, with two private equity funds and a bank agreeing to invest $20 million in the production, and negotiations with three more funds underway.
Given 20th Century Fox's wide distribution channels in both North America and abroad, most of the film's overseas distribution work will be handled by 20th Century Fox's various overseas branches. The presale of overseas rights is minimal, with the production's funding mainly coming from various financing sources.
Large film companies, especially those with distribution capabilities, undoubtedly offer a safer bet for investors.
The saying "content is king" holds true; a production company that possesses this element undoubtedly has the greatest competitive advantage. In a marketable situation, the risk of film investment is also greatly reduced.
A company like 20th Century Fox, with strong distribution capabilities, has inherent advantages in penetrating the upper end of the industry chain. They have developed a keen judgment ability through extensive market-facing experiences, making the distribution link the central part of the industry chain for major film companies, whether private or institutional.
With these guarantees, the financing avenues for films are undoubtedly the most open.
Film financing can come in various forms, the most common being bank loans, which do not differ much from regular commercial loans and do not involve copyright issues.
The most complex financing methods are private equity funds and tax incentive financing.
Like Murphy's Stanton studio, private equity funds invest in films not for interest but for a share of the profits and copyright earnings, under significant interest pressure, aiming for higher returns.
However, copyright is a taboo for big Hollywood companies, which generally do not share long-term earnings of a film with private equity investors. Instead, they agree to buy back the financier's shares within a specific period to maintain copyright integrity while ensuring a smooth exit for investors.
With adequate financing channels, the subsequent investment in "Deadpool" is assured. After Paul Wilson sent many suitable outdoor locations from Australia, Murphy, along with Phil-Lasher, Helena-Espola, David Roby, and several producers, headed directly to Australia to scout and confirm suitable filming locations.
Originally, Murphy wanted to leave the Los Angeles tasks to Cara-Fest, but since she also had business in Australia and chose to travel with him, Murphy temporarily entrusted some less critical casting work to Seth Rogen, who was assisting him as a director.
"I'm going to Australia to handle tax incentives," Cara-Fest said, unbuckling her seatbelt in the first-class cabin, speaking to Murphy beside her. "This is also part of the investment."
"Tax incentives count as investment?" Murphy was puzzled. "You're bringing all those documents just for this?"
He had noticed Cara-Fest carrying a large amount of documentation and contracts to the airport.
"Before filing for tax incentives, I must prepare an attractive business plan and project description, director's statement, creative team list, candidate list, script, plot summary, and main cast or candidate list," Cara-Fest explained.
With these materials, she could secure incentive funds from the Australian government.
Murphy nodded. Since the film's inception, Cara-Fest hadn't been much involved in the direct preparation work for the production, leaving most of it to him and focusing more on securing funding for the team.
Films can be financed in many ways, and each production team needs to find the most suitable financing methods for their project.
The situation is currently favorable, with North America gradually recovering from the 9/11 trauma, the federal government boosting the real estate industry, and the economy thriving with rising property prices and booming bank loans related to real estate across the country.
With the economy's support, Hollywood's financing becomes much easier.
However, Murphy knows this situation will change in a few years, making financing challenging during an economic downturn, with discussions on risk aversion prevalent in the industry, leading to less willingness to invest in film productions.
"Cara, if there's an economic crisis," Murphy voiced his concern, "do you think film financing will still be relatively easy?"
"Economic downturns will definitely affect investors' decisions," Cara-Fest, who seemed more knowledgeable about the economy than Murphy, said. "Even in a crisis, Hollywood can still attract funds. The key is to have an excellent project with a marketable strategy and to be the person investors deal with. As long as you can convince them, financing won't be a problem."
Upon arriving in Sydney, the capital of New South Wales, Murphy and Cara-Fest split up. He led his team to scout filming locations, while Cara-Fest, accompanied by lawyers and accountants, negotiated with the Australian government.
After staying in a hotel to adjust to the time difference, Murphy and the director of photography, Phil-Lasher, and the art director, Helena-Espola, first visited the Fox Studios to inspect the sound stages. The production design, props, and art direction teams would soon arrive in Sydney to set up the scenes in the sound stages as per Murphy's requirements.
Australia is a crucial overseas filming base for Hollywood, with the Australian government offering various policies like tax rebates to attract Hollywood productions and boost local employment.
The Fox Studios in Sydney is a significant project aimed at attracting Hollywood investments.
More accurately called the Australian Fox Studios, it is a major film studio located in Sydney's Moore Park, formerly the Sydney Exhibition Ground.
Owned by News Corporation, it opened in May 1998 and is one of Australia's three major film studios.
Murphy chose to film there not only for the tax incentives as an investor but also for the access to advanced equipment.
It's undeniable that, due to their age, most of Hollywood's and Burbank's studios and sound stages appear somewhat rundown, with outdated equipment. In contrast, Sydney's Fox Studios, being relatively new, can provide advanced production facilities for films, television, commercials, music videos, and other related works. The studio also serves as a major TV program recording studio for 20th Century Fox, facilitating the film's promotion.
Fox Studios has a dedicated office area, with 20th Century Fox reserving over a dozen offices for Murphy. Among the many sound stages, Murphy chose a large and a small one for indoor scene setups.
Similar to Hollywood studios, it also features a tour area with huge posters of famous films shot at Fox Studios, such as "The Matrix," "Moulin Rouge," "Star Wars: Episode II – Attack of the Clones," and the upcoming "Star Wars: Episode III – Revenge of the Sith."
At Fox Studios, after meeting with Paul Wilson, Murphy also met with
a representative from an entertainment agency. "Deadpool" would employ many temporary Australian actors and workers.
This decision was based on two considerations: first, the significantly lower cost of employing locals compared to bringing a large number of temporary actors and workers from North America, considering the expenses for flights and accommodations; second, the Australian government's tax rebate policy mandates benefiting Australians.
After reaching an agreement with the entertainment agency in the office area, Murphy unexpectedly encountered a person he had seen at Warner Brothers.
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