RISKY BUSINESS; CRACKDOWN ON PHONY ENTERTAINMENT COMPANIES HURTS LEGITIMATE HOLLYWOOD PRODUCERS.Byline: Gregory J. Wilcox Daily News Staff Writer For hours on end, Michael Altman scurries between the big projectors at CFI CFI abbr. cost, freight, and insurance Laboratories, threading rolls of famous film through reels and watching someone else's dreams flash by at 24 frames a second. It's a job of soul and inspiration. Altman is determined that someday one of his films will make the same reel-to-reel journey. To get there, Altman, along with friend Phillip Gessert, have formed Altman Gessert Entertainment and are now starting to raise money for their independent films. They plan to tap the venture capital market, which means, in part, hiring telemarketers to raise money via telephones that will help take their film from an idea to a theater near you. ``I don't know Don't know (DK, DKed) "Don't know the trade." A Street expression used whenever one party lacks knowledge of a trade or receives conflicting instructions from the other party. how much of our revenue will come from direct cold-calling. We're looking at hopefully (starting) at the end of next month and getting everything set up with a fellow that's financed four other pictures,'' said Altman. But their fund-raising task recently became much more difficult. Last month, law enforcement officials cracked down on an array of entertainment-themed businesses that have fleeced fleece n. 1. a. The coat of wool of a sheep or similar animal. b. The yield of wool shorn from a sheep at one time. 2. A soft woolly covering or mass. 3. Fabric with a soft deep pile. starry-eyed investors nationwide out of at least $100 million. Among those targeted by Operation Risky Business were companies that promised to create movies, television programming and an infomercial in·fo·mer·cial also in·for·mer·cial n. A relatively long commercial in the format of a television program. [info(rmation) + (com)mercial.] Noun 1. for Elvis Presley memorabilia with the money raised. Instead, the cold-callers pocketed the money, officials said. Altman and others who dream of Hollywood glory say the crackdown, while important, has made their job that much more difficult. They say they've got a legitimate business proposal that's now being ignored by a public afraid to invest in something they can't hold in their hand or see on the Internet. Law enforcement officials have little sympathy. ``The basic guideline is never, under any circumstances, invest over the phone. Hang up,'' said Herschel Elkins, a senior assistant attorney general for California and head of the attorney general's consumer law section in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. . ``That's got to be one of the wildest investments around. There is no reason to invest money with someone who calls.'' But Hollywood veterans say working the phones is the only way some independent filmmakers can raise money for their projects. Eric Freed, a venture capital broker from Woodland Hills, estimates that film projects raise annually about $50 million in venture capital, some of which is raised via telephone solicitors. Some of that capital comes from more traditional sources like banks, especially if a big name is associated with the project. The drawback with banks, though, is that they can assume creative control of a film if budgets are not met. ``If you are raising money for independent productions that have a name-brand celebrity, it's fairly easy to obtain financing for it. If you are trying to raise money for directors that are not known or stars that are not known, then it can be difficult,'' said Freed. When private money is raised through venture capital then directors and producers like Altman and Gessert can retain their creative control. Freed said he's been a venture capital broker for 13 years and buys lists containing the names of people who might be potential investors. ``I call them up and promote my product. Tell them what I have and what it could possibly do for them,'' he said. ``I make sure all my clients know the risk before getting involved.'' He resists the telemarketer label. ``Being that everything is sold over the phone you could call it telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. , although I would not consider myself a telemarketer because telemarketers have a negative connotation con·no·ta·tion n. 1. The act or process of connoting. 2. a. An idea or meaning suggested by or associated with a word or thing: to them. ``I put my investors into investments that actually make money and are not outright scams,'' said Freed. His most recent fund-raising effort Noun 1. fund-raising effort - a campaign to raise money for some cause fund-raising campaign, fund-raising drive crusade, campaign, cause, drive, effort, movement - a series of actions advancing a principle or tending toward a particular end; "he supported involved a film called ``Everything George,'' featuring a digitally re-created George Burns Noun 1. George Burns - United States comedian and film actor (1896-1996) Burns, Nathan Birnbaum . Freed said the film had a $9 million budget, about $6.5 million of which was raised through venture capital. ``That's one film that has been shot and edited and gone through CFI labs. I'm actually quite proud of that film because its something that will probably do quite well for the investors,'' he said. The deal was structured so that investors receive 90 percent of the gross revenue until they receive 125 percent of their principal. Units were sold at $20,000 each but some investors got in with a $5,000 stake, said Freed. When Bill Lansford, owner of El Dorado El Dorado, legendary country of South America El Dorado (ĕl`dərä`dō, –rā`–) [Span.,=the gilded man], legendary country of the Golden Man sought by adventurers in South America. Productions, an independent film company he runs out of his beach house in Playa playa or pan or flat or dry lake Flat-bottomed depression that is periodically covered by water. Playas occur in interior desert basins and adjacent to coasts in arid and semiarid regions. del Rey Del Rey may refer to:
``I called some of them up and said, Do you guys want to take a plunge?'' said Lansford. Some did, averaging about $10,000 each, despite being told there might never be a pot of gold. ``In our partnership agreement we have a big disclaimer that says this is no guarantee you will make money. We told them that we had absolutely no guarantee that you are going to get your money back,'' he said. One investor who wanted to take out a second mortgage on his house was turned away. Lansford won't say specifically how much he raised, but it was enough to make a feature called ``Adios East Los.'' It's about two young men and a woman who leave East Los Angeles East Los Angeles, uninc. city (1990 pop. 126,379), Los Angeles co., S Calif., a residential suburb of Los Angeles, in an industrial area. It has a large Mexican-American population. There is a performing arts center and a cultural center. A junior college is there. and discover the Anglo world. He plans to market his film through the festival circuit. Altman is of a like mind when it comes to raising money, noting that while a lot of projects are pitched with a $5,000 participation share, he's going to set his bar higher. ``We're talking about $25,000 minimum,'' said Altman, an Encino resident and son of renowned director Robert Altman. ``Anyone in that league would be able to afford it. That stays away from guys who have a little savings and are trying to get rich in an instant. That's a bad message to send out.'' CAPTION(S): 2 Photos PHOTO (1--Color) Film technician Michael Altman is starting his own movie production company and plans to raise investor funds by telephone solicitations. David R. Crane/Daily News (2) Filmmakers like Christopher Kinsman kins·man n. 1. A male relative. 2. A man sharing the same racial, cultural, or national background as another. kinsman Noun pl -men , left, and William Douglas William Douglas may be one of several people: Earls of Douglas
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