"Matt's last film, 'The Talented Mr. Ripley,' earned him a fee of $5 million!"
In the office, Howard, an agent from William Morris, said sternly, "The budget for 'The Talented Mr. Ripley' was $40 million, and it grossed $87 million in North America! The film was a huge success! Mr. Davenport, your asking price of $4 million does not align with Hollywood standards!"
Michael Davenport countered, "Mr. Matt Damon has never proven himself in commercial films. He is taking on a completely new type of movie with a new audience. His previous artistic films don't offer much reference value!"
Howard emphasized, "Isn't 'The Talented Mr. Ripley' a commercial film? Isn't 'Saving Private Ryan' a commercial film?"
Michael was well aware that Matt Damon's last film earned him $5 million, and with the box office success of 'The Talented Mr. Ripley,' $4 million was certainly not enough.
But Howard was demanding a $7 million fee, plus a share of the backend profits, which needed to be negotiated.
After Matt Damon auditioned for the role, the fee negotiations dragged on for three days. In those three days, Michael met with Howard four times.
These negotiations were necessary because stars are always brimming with confidence, and if they were allowed to name their price, even third-tier stars would dare ask for over $10 million.
Negotiations with Matt Damon's side also involved the subsequent two sequels. If 'The Bourne Identity' succeeded, sequels would inevitably follow. If the fee for the first film was high and included backend profits, what about the next two?
Would one person end up taking a third of the profits like Tom Cruise in his films?
Michael also tried to sign a three-film deal with Matt Damon at once, but Matt Damon was a second-tier star in his prime, unlike Paul Greengrass. Howard wouldn't even discuss this.
After three days of negotiations, they finally reached an agreement: Matt Damon's fee for starring in 'The Bourne Identity' would be $6 million, with no backend profits.
However, Matt Damon had some doubts about working with Sands Entertainment for the first time and requested a third-party payment method for his fee.
This method is commonly used by many star actors when working with small companies or independent producers, and Michael was undoubtedly categorized as an independent producer in Hollywood.
Third-party payment means that the production company must deposit the full fee in a large American bank, which then pays the actor according to the contract terms.
This method helps actors mitigate risks and offers better security, ensuring that the producer has the funds to pay.
Although this would somewhat increase costs for Sands Entertainment, Michael, considering the film's financing, agreed to Matt Damon's request.
Sands Entertainment opened a dedicated account at Bank of America, borrowed $6 million from Relativity Entertainment, and deposited it into the account, counting it as part of the film's budget.
Michael agreed to these terms but also set conditions: Matt Damon had to join 'The Bourne Identity' production team immediately after the Oscar ceremony that year and participate in pre-shoot action training.
To produce effective results, training was necessary.
Both sides agreed on this point. Matt Damon's side also agreed.
With the key points like the fee settled, the remaining issues like scheduling, health insurance, credits, nudity, and dressing facilities were handed over to a deputy producer.
Michael then contacted Bob from the Fireman's Fund, submitting a series of prepared documents to the insurance company.
Having a star actor on board also helped with the third-party completion bond application.
Additionally, the films Sands Entertainment had planned over the last three years were all completed, which was advantageous.
The day after signing the formal contract with Matt Damon, a team of professionals including underwriters, claim adjusters, and loss prevention representatives from the Fireman's Fund began reviewing the production. If a formal third-party completion bond contract was signed, a few members of this team would stay with the crew.
Don't expect to fool these people with small tricks; the insurance company hires experienced industry veterans who have worked in production companies.
Once the film insurance company decides to underwrite a film, they activate their "risk prevention" system, first assessing the physical condition of the key director and star actors, and arranging periodic check-ups during the shoot. Special supervision is given to stars with bad habits or poor health.
For instance, during the 1996 shooting of 'The People vs. Larry Flynt,' because lead actress Courtney Love had a history of drug use, the Fireman's Fund required her to undergo weekly drug tests or they wouldn't provide insurance.
With sufficient preparation, the strong health of Matt Damon and Paul Greengrass helped 'The Bourne Identity' pass the Fireman's Fund review, leading to the signing of a third-party completion bond contract in addition to the general insurance contract.
Since 'The Bourne Identity' is an action film with many action scenes, the third-party completion bond insurance, following Hollywood norms, was 4% of the budget, amounting to $2 million. If the budget increased later, the insurance cost would also rise.
The main function of this completion bond is to allow the insurance company to take over the production in case of any issues with the producer or crew, ensuring the film's completion.
If completion fails, the insurance company would compensate all investors with a total of $60 million.
This insurance contract's primary purpose is to boost potential investors' confidence, attracting investment for the production.
Completion bonds are crucial in Hollywood filmmaking, often required by investment funds or banks before investing in or lending to a film project.
It also ensures that no investor can easily withdraw their funds from the production.
The completion bond provider sets up a third-party account for the production, where all investors must deposit their pledged funds within a certain period. Without the bond provider's signature, no one can withdraw funds within the effective period.
Regarding 'The Bourne Identity,' Michael didn't plan to play any budget tricks. With the Fireman's Fund's immense reputation and influence in the insurance industry, potential investors' confidence was solidified, encouraging them to boldly invest in Sands Entertainment's project.
With insurance company guarantees and Sands Entertainment's and Relativity Entertainment's consecutive successful film projects, Michael didn't need to resort to deceptive tactics like in his first trip to Abu Dhabi.
It's no exaggeration to say that completion bonds are key to Hollywood's ability to secure external financing.
Of course, benefits come with downsides.
The insurance company fully integrates into the crew's work, analyzing every scene in the script for potential risks beforehand. Once filming starts, sharp-eyed loss prevention representatives ensure safe shooting practices on set. If a scene poses a threat to the lead actors, they will prevent them from participating.
There's no such thing as getting benefits without costs in this world.
For larger Hollywood crews, money flows like water. The actual production cost may not differ much from the reported figures, even if companies falsify them.
The third-party completion bond for 'The Bourne Identity,' along with other general insurance costs, has already reached nearly $2.5 million, with many personnel and equipment yet to arrive. The total insurance cost is estimated to be around $3 million.
Insurance is a must-buy, as required by the Directors Guild and the Screen Actors Guild. Given Sands Entertainment's development and the investment scale of 'The Bourne Identity,' not registering with the guilds would result in a long line of troublemakers.
Moreover, buying insurance has no downside, as the likelihood of accidents on a film set is high.
With the third-party insurance contract in hand and a star like Matt Damon on board, Michael's confidence in securing financing increased, accelerating various preparations.
He prepared company documents, film-related materials, and association certifications, filling three large suitcases.
It was less than his first trip to Abu Dhabi.
This time, there was a targeted goal. Robert had contacted the Falchi Foundation and the Mountain Foundation in Mumbai, India. The former showed no interest for now, but the latter was very keen on investing in Hollywood blockbuster films.
As long as there's interest, that's good.
For this trip to India, Michael assembled a small team. Mary stayed in Los Angeles to handle a series of financial tasks, temporarily withdrawing from the financing team. George Clint, the production manager, would accompany him, joined by Garcia Rodriguez as the distributor representative, along with three employees skilled in external liaison.
One of them, Connie, a graduate from UC Berkeley's business school, would temporarily act as Michael's assistant.
Additionally, there were two bodyguards.
After completing the preliminary work, Michael held two internal meetings, focusing on the internal structures of the two foundations and the information on relevant contacts provided by Robert, to be well-prepared upon arrival in Mumbai.
Michael had never been to India. In his past life, it was known as a country of great potential, with low status for women and frequent violent incidents...
But the actual research showed that while some Indians weren't as wealthy as Arab oil tycoons, they were still waving checkbooks and buying all over the world.
Perhaps countries experiencing rapid growth all go through such a phase.
Mid-February 2000.