Chapter 164: Everything is Ready

Jiang Jiang Qinqin, Dong Jie, and other women might recall Proprietor Lu in the dead of night and curse him as a scumbag.

But right now, Seeing Lu Kuan is not only being a scumbag to women, but also to a crowd of domestic entertainment companies and state-owned film companies like China Film Group and Shanghai Film Group that were eagerly awaiting his return.

He dragged Tang Mu along at Cannes to build hype and show off during a film channel livestream, and the latter's casual mention of a collaboration left the domestic entertainment industry frantic.

A collaboration with a Hollywood star whose salary is 20 million USD?

Hollywood has a list of the most powerful stars, and Tang Mu has long dominated the list due to his sky-high contract with Paramount.

What would a Hollywood top-tier star like that collaborate on with a Chinese director like you?

Han Han Shanping, Jiang Jiang Zhiqiang, and others could naturally vaguely guess it was the sci-fi film he had mentioned before, but this step was just too big!

The uninformed film and television companies and talent agencies were practically going crazy, but they didn't have Seeing Lu Kuan's contact information, so they could only harass Wenjie every day until they were a nuisance.

They were almost about to turn the Chairman's Office Director, Sun Sun Wenwen, into the most powerful woman in domestic entertainment.

Since Wenjie had always maintained a "no comment" stance to the outside world, no one knew that Seeing Lu Kuan had flown straight to the United States after the film festival ended and had been in Los Angeles for nearly a month.

He had already obtained a one-year, multiple-entry business visa back in China, and this month was spent running the procedures for the co-production *Alien Territory* in Hollywood.

"Lu, the reply from the Louisiana state government has arrived!"

Emil excitedly entered the office holding the faxed document.

"What does it say? How much can they refund?"

"18%! This figure will increase in this year's bill."

Louisiana is the bridgehead for tax rebates in the United States, having engaged in various types of tax rebate work since 1991 to attract investment and immigration.

By the later years of 2014, 45 states, including the major state of Southern California, had introduced film tax rebate regulations; their annual tax rebates could account for about 25% of Hollywood's output value, which is very astonishing.

Proprietor Lu deliberated: "The intensity is still too low. Our current needs are, first, to have the tax rebate advanced, and second, for the total amount to be favorable to us."

Emil frowned: "Toronto, Ottawa, and other places can provide a maximum 50% special effects tax rebate, but their rebates are paid to the special effects companies, and we still need to negotiate the price."

"Moreover, the level of local special effects companies is uneven, and there are no companies worth mentioning."

"What about Australia and New Zealand?"

Emil knew them like the back of his hand: "Australia is 35%, New Zealand is 30%, but New Zealand can provide advance tax rebates, so our capital costs will be lower."

The special effects budget for *Alien Territory* is around 30 million, accounting for almost 45% of the film's cost, so the region for special effects production must be chosen carefully, as this has a huge impact on the overall cost.

The current problem is how much cash Wenjie can actually put up for the initial investment in the project.

If money weren't an issue, one would definitely choose Australia; even if the tax rebate is a bit late, one could get 1.5 million USD more back.

"By the way, has our *Paranormal Activity* been settled for this month? Lionsgate must be anxious by now, right?"

Previously, Seeing Lu Kuan and Jason from Lionsgate had made a bet on a DVD distribution volume of 500,000 copies, but this figure had already been reached before the Cannes Film Festival.

According to the previous contract agreement, Lionsgate would bear the distribution of these 500,000 DVDs and the film version of *Paranormal Activity* at a lower rate of 30%.

Speaking of *Paranormal Activity*, Emil was also in high spirits.

"Currently, 640,000 copies of the DVD have been sold in North America. After deducting Lionsgate's distribution and promotion expenses, our profit is about 5.8 million USD."

"The more than 1,000 screens under Lionsgate's control have already started promotion and distribution, currently mainly midnight and evening screenings, and the theatrical release work will begin in July."

Money bolsters courage; with another 5.8 million USD in income, Seeing Lu Kuan decisively chose to place the special effects in Australia.

After all, the special effects for *The Matrix* were handed over to Australia's Animal Logic, a special effects company acquired by Netflix in 2012.

*Alien Territory* has high requirements for special effects; the more basic parts will be completed by Seeing Lu Kuan's domestic special effects company, Butian Pictures, and the more difficult parts will be handed over to Animal Logic.

After all, it is a big order of over 30 million USD; Seeing Lu Kuan will represent Butian Pictures and request to station technical personnel to observe and learn, including the introduction of advanced equipment.

In a sense, this is far more important than making a successful film; technology is priceless, and this 30 million USD also includes tuition fees.

After chatting about the special effects details, Seeing Lu Kuan and Emil split up; he went to register the company, and the latter went to the union to run the procedures.

In Hollywood, a short-term company is generally established for each film. The fiscal year for this type of company is 11 months, and its main purpose is to isolate risk.

Even if the film flops, it won't touch the investors' foundation, and it is also convenient to carry out tax avoidance and profit modification in the accounting sense within the new company, making it easy for Hollywood capital to harvest bottom-level workers.

For example, if the contract you signed as a director is for 5% of the film's net profit, the film company will make the net profit a negative number.

Because these film companies are usually not only investors but also distributors, film distribution expenses are equivalent to moving money from the left hand to the right hand, making bookkeeping very convenient.

And Emil going to the American film union in Beverly Hills was purely to make the film meet the requirements of a completion bond.

Although the special effects for *Alien Territory* are placed in Australia and the filming is in Canada, only by having the status of a union film can one sign a completion bond agreement with an insurance company.

But once it becomes a union film, the actors he selects must be union actors, and he can no longer exploit them with 996 work hours as he does in China.

Everything requires extra pay!

This completion bond is a prerequisite for the pre-sale and financing of a film project.

Once the completion bond is obtained, the insurance company will ensure that the film is completed within a fixed time limit and budget and delivered to the distributor.

If problems arise midway or the delivery is delayed, the insurance company is responsible for the compensation.

Correspondingly, the investor will register a film company, which is the short-term company established by Proprietor Lu mentioned above.

This company will own the copyright to this *Alien Territory*. If the insurance company pays compensation, the copyright will be paid to the insurance company due to the previous mortgage.

To reduce its losses, the insurance company will then take the copyright and find a buyer.

Then Seeing Lu Kuan takes this completion bond and the pre-sale terms to the bank for financing, obtaining the final 25 million USD loan for the film.

This completes the financing process for the entire project, and what follows is the step-by-step filming, finished film, distribution, and finally, everyone splitting the money.

Of course, before the film is pre-sold, the lead actors still need to be finalized; this is the key to whether the pre-sale price can be increased.

Only with superstars does a film have appeal, and only then will the pre-sale distribution company sign a contract with you in advance, and only then can you take the contract to find a bank loan.

This Hollywood process of independent film financing and production is interconnected, and the stakeholders in each chain share risks and responsibilities, which is why an increasingly mature film industry system has been spawned.

The filming location, special effects production location, new film company, and union film process are all ready; only one thing remains: casting.

Casting in Hollywood is a very rigorous process, generally completed by a casting director hired by the crew. The casting director Seeing Lu Kuan asked Tang Mu to find is Juliet Taylor.

She is also Woody Allen's go-to casting director; *Schindler's List*, *The Life of David Gale*, and the later *Midnight in Paris* are all her casting works.

"Hello, Lu, it's nice to meet you."

Seeing Lu Kuan also responded with enthusiasm. Ms. Taylor is about 45 years old this year, but she has a great reputation in the Hollywood casting circle.

Not only because her eyes are like torches and she is familiar with the acting skills and salary situations of different stars, but also because she is well-connected in the circle by relying on the master Woody Allen, and first and second-tier stars all give her some face.

To put it bluntly, she knows who is a fraud and who is worth how much money, which can save the director a lot of mental effort and difficulty in choosing.

Taylor invited Seeing Lu Kuan and Emil into her office. The character biographies for the main cast in *Alien Territory* were neatly arranged on the table; this was written by her based on the script and her communication with Seeing Lu Kuan.

Male Lead: Around 30 years old, one of the main cast, Earth Federation special agent, brave and loyal, familiar with various combat skills, possesses basic scientific theoretical literacy.

Female Lead: Around 20 years old, one of the main cast, Chinese descent, father is a Chinese scientist and current director of a department at the base, intelligent and beautiful, agile, proficient in ancient Chinese martial arts.

Male Supporting Character 1: Around 45 years old, one of the main cast, Earth Federation special agent, likes drinking, whoring, eating fatty meat, and diet pills.

Male Supporting Character 2: The female lead's father, Chinese descent, a scientific expert who cares for all of humanity, founder of the time-scale conservation principle, finally perishes together with Dr. Ximai.

Male Supporting Character 3: The founder of Ximai Farm, a student of Male Supporting Character 2, applier of the time-scale conservation principle, a selfish scientist and politician, leader of the Federation.

Seeing Lu Kuan looked at the character biographies and the actor recommendations behind them given by Taylor in his hand and nodded silently; professionals are just easy to work with.

"I will select the female lead and Male Supporting Character 2 from domestic actors; now the main thing is to finalize the candidates for the male lead and the remaining two male supporting characters."

Taylor nodded: "I heard from Tang Mu that you are more interested in Adrien Claudy and Sean Penn?"

Seeing Lu Kuan nodded: "Sean Penn has a great chance in the next Oscars, and now is a good opportunity to sign a contract with him. What is his salary?"

"8 million USD."

"Good, send him the script first."

When sending audition and performance invitations to Hollywood big shots, generally you can only send to one person at a time.

Only when the previous person has clearly refused or the negotiation has not been successful can you continue to show it to the next person.

This is somewhat different from the domestic situation where a bunch of people go to find the director for an audition; overall, it is still money talk.

Those with value, whether they are stars, directors, or even photographers, always have priority.

Taylor followed suit; when it comes to familiarity with the characters, of course, the director's opinion is the priority.

"For the Chinese scientist, I plan to invite the male lead of *The Lover*, Liang Liang Jiahui."

Taylor has seen many films; *The Lover* was submitted to the Oscars in 1993, so she naturally knows this Chinese actor.

"A very good choice, he is very suitable."

"Then that leaves Male Supporting Character 1 and Male Supporting Character 3. For the special agent, my suggestion is John Travolta."

This is Quentin's go-to supporting actor, whose performance in films like *Pulp Fiction* is very eye-catching, and he has also been nominated for two Oscars for Best Actor.

Seeing Lu Kuan stroked his chin and considered for a while, substituting his image into the Male Supporting Character 1 who is full of vices; it is very suitable.

"Okay, what about Male Supporting Character 3, Dr. Ximai?"

"Gary Oldman, Bruce Willis, and Kevin Spacey."

"Kevin Spacey? He's not cheap, right?"

"10 million USD. Supporting roles will be a bit cheaper; it can all be negotiated. He recently encountered some tax issues."

"Let's look for Gary Oldman first. I know Luc Besson; I can talk to him about the price."

Gary Oldman is the villain in *Léon: The Professional*; his age, image, and temperament all meet the character requirements of Dr. Ximai changing from a scientist to a cold politician.

"Lu, is there anything else to add?"

Seeing Lu Kuan slapped his head; he almost forgot.

"Help me do a background check on everyone's political leanings. I don't want actors with anti-Chinese leanings or remarks, or those with other extreme political leanings; help me exclude them and move directly to the next candidate."

This is to avoid political risks for the global release in the future, just like Bale in Zhang Zhang Yimou's *The Flowers of War* in the later years, who inexplicably went to see a blind person, almost causing a serious political incident, which made Zhang Zhang Yimou so angry he vomited blood.

Taylor nodded silently; this young Chinese director doesn't look like a novice breaking into Hollywood at all; he is very thoughtful in every aspect.

Casting takes time, especially for important roles, which must be negotiated one by one, including the final salary negotiation.

On July 24, 2003, Seeing Lu Kuan, who had escaped the hustle and bustle of domestic entertainment, had been busy in the United States for nearly two months and finally arrived in Beiping by plane with A Fei.

(End of chapter)