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about 2 percent of the budget.
    Step Three. With the completion bond in hand, and the pre-sales contracts as collateral, the producer then borrows the money from a bank or other financier. Since the completion bond companies are themselves backed by giant insurers, such as Lloyds of London and Fireman’s Fund, the banks take only a very limited risk in making such loans. John W. Miller, who recently retired as head of JP Morgan Chase’s movie financing unit, told me that in issuing billions of dollars in loans he did not read the scripts of the indie films he finances. “My bet is on the solvency of the distributors.” When these pre-sales contracts are with established international distributors, such as SonyPictures, Canal Plus, Toho Films, or Buena Vista International, that risk is, he said “negligible.”
    Even after scaling all these hurdles, securing the money, and making the movie, the indie producer faces one further challenge: getting the movie into American multiplexes. Even with a completed movie and star, finding a distributor requires going from film festival to film festival, an odyssey that often proves unfruitful. (More than 2,000 indie films were submitted to the Sundance Film Festival in 2009, for example, of which about one percent were accepted.) However, the presence of a star greatly improve its chances, especially in those festivals, such as Cannes, Berlin, Venice, and Toronto, that depend on stars for publicity and photo-ops. As one highly successful indie producer explains, it gives the acquisition executives there more of an incentive to give the film a chance with distribution, because they figure that, even if the film is a hard sell, they can always promote the star. Selling the film ultimately is what it’s all about. So the Hollywood star as
homo ludens
, or at least seeking some kind of non-monetary gratification, winds up as the crucial element in a business model that has sustained a large part of independent films—and, for that, we can all be grateful.

THE ANGST QUESTION IN
HOLLYWOOD: WHAT IS YOUR
CASH BREAKEVEN?
     
    In the arcane universe of Hollywood contracts, there are two kinds of money paid to stars, directors, actors, and other participants in movies. The first kind is called “fixed compensation” and is paid out, like any other wage, when the participant does his job. The second kind is called “contingent compensation,” which depends on how well the film does, is typically not paid until the revenues reach an arbitrary point artfully called “cash breakeven.” Whatever percentage a participant is supposed to get, whether it is based on gross or net points, it is triggered by this contractual definition. In some contracts in lieu of the star receiving any sizable fixed compensation, the cash breakeven is set at dollar one, which means his pay kicks in immediately after the print and advertising costs are reimbursed, but usually it is set high enough to allow a studio to recover most of its production costs. Not only may the definition vary from film to film, but it is not unusual for many participants in the same film to have different cash breakevens. For each participant it is defined not by any set accounting rules but by Hollywood’s prevailing Golden rule: Who has the gold makes the rules. The contentious negotiations, which centeraround self-serving claims about how much gold any participant might add to the venture, almost irresistibly lead to the most powerful player getting the lowest cash breakeven, which means he or she will be the first to get paid. The problem here is that the money paid first to the more powerful players is added to the cost side of the equation for everyone else, which pushes them further away from reaching their higher cash breakeven. As a result, the less powerful, which includes writers, may never qualify for their contingency payments. Woody Allen jokes in his movie
Hollywood Ending
about a director being so lowly regarded that