By ERIN GAZICA, a freelance writer from Pottstown, Pa.
The next great blockbuster could be out there and you don't even know it. Film and television producers, especially those of the independent variety, are feeling the financial crunch these days. When a grand production is in the works it could just be the insurance advisors who make all the difference in determining whether or not throngs of teens will be sitting in front a big screen actually showing that movie come next summer.
Fred Milstein knows this all too well. He is Aon/Albert G. Ruben Insurance Services Inc.'s brand new managing director of worldwide marketing and business development. And he just happens to be an entertainment industry insider.
"We've been looking at a number of areas where via various insurance or risk transfer products we can help producers access additional financing," Milstein said. "Ultimately, all of these services surrounding a film producer is to help them get their movie made--made efficiently, effectively, safely and within the tight budget that they are all now struggling with."
According to Milstein, who got his start in the mail room at William Morris Agency in New York in 1975, the film and television business has changed enormously. Financing has become incredibly complex and increasingly driven by tax incentives offered by various states and countries to attract production.
For independent film producers, those tax incentives make all the difference, in fact, they need that money up front to finance their films. Banks and lenders have figured out how to advance against what the eventual tax incentive will yield and producers can then borrow that money as part of their financing.
Aon/Albert G. Ruben is currently working on insurance products that will help protect the lenders in making those loans. Milstein's knowledge and connections with lenders, gathered from spending the last 12 years in the completion guarantee business, will give an extra edge to the company that essentially invented the entertainment insurance business.
"There's been a real dip in the last year in independent productions," said Milstein. "There are a lot of issues including, obviously, the financial crisis. There are less sources of money and less money currently available for independent productions. If we can be helpful in mitigating lenders' risk and encouraging them to take a positive view on providing cash against these tax incentives up front for film producers, it stimulates more film production."
In his job Milstein is charged with developing new business areas, something he's excited about doing. He'll get to help Aon clients, some of which are the same people he's worked with for decades, leverage a wide range of products and services available in the worldwide Albert G. Ruben network. Part of what attracted him to the new job was the prospect of an evolving insurance brokerage business.
"The business of being an entertainment insurance broker has changed, we think, from just a kind of reactive business of your client comes in and says, 'I'm making a movie, get me A, B, and C coverages,'" said Milstein. "It's really turned into a very engaged, proactive, advisory and consultancy business to be able to help your client minimize risk and maximize their potential in the film and television marketplace."
In addition to showing clients a real understanding of their business costs and processes, Milstein said broadening the international reach of the company will be important to him as he goes forward in his new job. With a special interest in Asia, he said he wants to be on the cutting edge of providing products and services as the need for them develops.
"As Asian business rationalizes itself, and as a financial model producing films and television becomes more akin to what we do in the West, the need for the kinds of products and services--whether it's completion bonds or E&O insurance--all of these other areas are going to become more and more necessary," Milstein said.
Being able to put skills to work that he's fine-tuned since his days as a talent agent in New York makes Milstein feel as if he is simply continuing his career in the entertainment industry, not leaving it. After working his way up at William Morris Agency and moving with the company as it opened up a Beverly Hills office, he later joined Cineplex Odeon Corp. and then Miramax Films as head of production. It was here that Milstein worked on packaging--finding scripts, getting a director, adding actors and obtaining financing and distributors.
Milstein further expanded his Rolodex, and his range of experience, when he joined the Completion Bond Company and later founded the international completion guarantee company, cineFinance. As president of cineFinance, Milstein pioneered a lot of work in Asian, specifically China, over the last eight to 10 years. The company just last year underwrote John Woo's $80 million epic drama, "The Battle of Red Cliff." He said the two-part, five-hour film was the largest, in terms of budget and scope, to have ever been made in China.
"It was a herculean undertaking," said Milstein. "I spent time on the set and it was fascinating watching this huge epic get made that I don't think you could even produce in the West given its size and scope."
The film is the first to come to Milstein's mind, perhaps because it was the last one he worked on. But the entertainment industry veteran said he doesn't have a favorite movie, that he's been involved in so many interesting films over the years that he just has many favorite stories.
"I've always loved movies," he said. "Even in college I studied films as a cultural product, almost the same way you would study novels and literature as a reflection of the historical times they were written in. I just watched a lot of movies and then I really got into it when I went to film school at USC. I always knew I would work in films, just never as a writer or director or producer."
Milstein said he found his niche as an agent because he was in the middle of it all?representing writers and directors, working with producers to obtain financing and find distribution. According to him, his newest venture at Aon/Albert G. Ruben is harkening back to his days at William Morris Agency, since the entertainment insurance business has morphed into an important advisory role in the center of the overall filmmaking industry.
"I guess once an agent always an agent," he said. "But it's great because I have a much bigger sandbox to play in now and a tremendous amount of other resources to draw upon to help each of the clients, many of whom I've known for years, to help them through these fairly treacherous times."
October 1, 2009
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