Home / Industry / Why Tamil cinema still battles financing woes

New Delhi: Late last month, Tamil film producer Ashok Kumar hanged himself to death in his Chennai apartment. A cousin of popular director M. Sasikumar, Kumar blamed leading financier N. Anbuchezhian for his suicide in a two-page note, saying he had to pay exorbitant interest for loans taken for producing films, had been harassed for years and ultimately driven to the brink by the financier when he couldn’t repay. The tragedy comes a few years after noted producer G. Venkateswaran, older brother of director Mani Ratnam, committed suicide, allegedly due to pressure from financiers, including Anbuchezhian.

Industry experts say financing troubles in Tamil cinema are about a lot more than loan sharks. It all boils down to the unorganized nature of the industry. Unlike Bollywood where the corporate-driven studio culture has only picked up in the last decade, the south Indian film industry, including Tamil, Telugu, Kannada and Malayalam cinema was led by private studios like Prasad Art Pictures and Gemini Studios in the 1980s and 1990s. However, over time though, the system disintegrated, resulting in smaller, independent producers. 

“Anyone can become a producer here (in the south)," said independent trade analyst Sreedhar Pillai. “Every year, 200 Tamil films are made, out of which 190 are made by first-time producers."

The unknown record of these individuals necessitates financiers who are individuals providing funds for film production at interest rates of 36-48% per annum. Assuming it’s even a Rs1 crore loan, the producer has to pay Rs4 lakh a month or Rs48 lakh a year in interest. A Bollywood production house, on the other hand, would get bank loans at 18-24% per annum. The crisis arises when films fail and individual producers have to take the hit, given that most of these are entirely personalized projects by people who have no experience in distribution or exhibition.

Further, Pillai points out, most producers in the south also get greedy for better pre-sales and don’t sign satellite or digital deals till the film’s release, expecting huge money. If the film bombs, prices come down to a fourth of what was expected.

Moreover, institutional funding is not the easiest alternative in the south. D. Paranthaman of production house V Creations that has backed films like Kabali, said bank interest rates fluctuate depending upon the producer’s track record and reputation.

“Banks will not give loans to everybody. It has to be a reputed company and artiste (in the lead)," said K.S. Ravikumar, director of films like Lingaa and Dasavathaaram. “Even then, there are many formalities which aren’t easy to work around. You should either know the higher authorities or have recommendations."

The need for loans, in the first place, trade experts say, stems from the mandatory presence of a bankable star to make a project viable. The star-driven culture, particularly of Tamil cinema, translates into not just mainstream, big-budget films dominating but financiers (and occasionally banks) approving loans only when there is a known face on board. Ravikumar emphasizes that a financier will not even consider a Rs1-2 crore film without big names since there would be no guarantee on its release.

“It (the funds given) depends upon the artiste. There are only four or five artistes who would be given big money; no one will pay for the others. They might give for directors, but without a star’s presence, it’s a risk for the financiers too," said P. Vasu, director of films like Chandramukhi and Kuselan.

Earlier, the film would be in the hands of the producer who would decide on the director and story, except maybe in case of a Rajinikanth, Kamal Haasan or M.G. Ramachandran-starrer. But today, the entire production process revolves around the leading man. And producers, especially in the Tamil industry, take loans to pay the hero in advance.

Trade experts say Tamil superstars like Ajith or Vijay get about Rs30-35 crore as remuneration, of which they demand Rs15 crore as advance. Telugu actors like Mahesh Babu or Pawan Kalyan, on the other hand, would be given Rs20-25 crore of which only a token amount of Rs1-2 crore would be demanded while signing the film and the rest would be given after completion.

“Today, heroes are deciding who the director would be, and sometimes even the producer," Vasu said. “If the director has a story, he will go directly to the hero. If I have a big hero in hand today, any big banner or corporate will come to me. But if I say I have a good story, they will ask if I have a hero."

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