Why would a state want a movie made within its borders?

Money, jobs, money, participation in the national culture, money, tourism and money were some of the reasons evident yesterday at a symposium of film commissioners from 37 states. They are meeting here for four days to exchange information and learn how to defeat Yugoslavia, Australia, Canada and yes, frankly, each other in the business of luring filmmakers.

And how may a state film board do itself proud? Well, if you watched "Divorce Wars" on television last night, the Mercedes that was dumped off a ferryboat into Puget Sound may conceivably popularize Seattle.

"Before it was dumped, the Mercedes was drained of oil and gasoline and completely steam-cleaned," explained Art Kulman, director of the Washington state film office, emphasizing that Mercedes-pollution of his state's waterways is not permitted.

The TV series "Centennial" was shot in Colorado. "They were there for nine months and each month they were there they spent $1 million," Karol W. Smith pointed out. He is the director of the state Motion Picture and TV Advisory Commission.

Each state has fancy brochures and polite and personable staffs, and each promises a minimum of red tape for filmmakers.

Alas, fancy brochures are not enough, the commissioners learned from Gary Concoff, formerly of Harvard University Law School but now a lawyer in Los Angeles specializing in finding financing for movie productions.

"What you must be able to do for a filmmaker is help him reach a 'critical mass' on his budget--that is, a saving of 25 or 30 percent," Concoff said.

When an independent filmmaker goes to a studio now with his $9.5 million idea, the studio is likely to say it is only worth $6 million. Somewhere he has to save $3 million. This is where the state comes in--or gets left out.

"It takes ingenuity to finance a movie today, and you must be able to help," Concoff said. He then described what he calls the Chinese menu form of deal structuring: that is, one from column A, one from column B, etc.

With U.S. tax shelter deals pretty much dead, a producer can consider "straight equity" or "private placement." However, friends with $8 million are hard to find.

So perhaps the tax shelter financing can be obtained in Canada. However, this means a mostly Canadian film (such as "Middle Age Crazy," which was set in Dallas but only 25 percent of which was filmed there). Canada has a point system for film financing: The director is a point, the writer is a point, the star is a point, etc., and 6 of 10 "points" must be Canadian nationals.

Australian financing? Yes, but to obtain money from Down Under the film content must be about Australia, and Australia is pretty strict about it.

Sometimes, Concoff went on, foreign distributors will advance money against a film to help get it produced. However, Germany is likely to put up only about $100,000 against the $6 million goal.

Perhaps a courageous and never-say-die producer would like to try a "theatrical pick-up deal." He goes, say, to Paramount, which agrees to pay $3 million up front upon completion of the film. "Now--how to turn the paper into money?" Concoff asked. You simply get some interim financing. From a bank. At 20 percent interest.

Oh yes, the bank will require a "completion guarantee." You get that from a completion guarantor. He in turn is protected by Lloyds of London.

To get some more money, one might think of preselling U.S. prime-time TV rights, Concoff said. The trouble with that is that the networks typically pay out the money over three or four years.

There's always pay cable television: HBO and its competitors. Now, if your movie was completed, you might hope to sell these rights for as much as $3 to $4 million, for a movie that cost $6 million to make. "However, if the film isn't made yet, the value will be discounted to about $1.5 million."

The state and city film commissioners listened to all this carefully. Why?

Because the producer may go to Yugoslavia to make his picture instead of Alabama or Charleston or New Jersey.

"Yugoslavia has cheaper rates, there is pure equity funding available under certain conditions, and they also offer loans at interest rates of 10 or 11 percent," Concoff said.