As U.S. filmmakers, buyers and sellers head for Cannes, they are tamping down expectations. And it’s not just because the economy is tilting steadily toward recession.
The May 8 shuttering of Picturehouse and Warner Independent cast a pall over the specialty business just as buyers and sellers were boarding planes to France.
The move follows another serious reality check: January’s Sundance Film Festival, where the 2007 record fest sales of $53 million gave way in 2008 to some $25 million. And $10 million of that went to just one pic, Focus’s pricey nab, “Hamlet 2.”
Many niche pics aspire to reach a “Juno”-sized audience, but with rising pricetags, they can’t be treated as art films by a distributor: A modest return on a modest investment is increasingly difficult.
The market is too crowded with indie fare. That was particularly noticeable in the run-up to the last awards season. Too many films opened and swiftly closed over the past year, with such high-profile buys as Weinstein Co.’s $4 million “Grace is Gone” vanishing without a trace.
Industry execs point to rising P&A costs. It’s easy to understand buyers’ reticence, with the MPAA’s recent finding that specialty arms’ advertising spending skyrocketed to an average of $25.7 million per film, a 44% increase.
“There seems to be a disconnect,” says one specialty distributor. “People are spending more to buy and more to open. If you are looking at a bigger budget movie in terms of buying it, where does that put you in terms of managing your risk? Some are pretty desirable, but should they open wide?”
It’s a question that’s sure to permeate negotiations at Cannes, where a handful of high-profile Hollywood features like Gray’s $15 million “Two Lovers,” starring Joaquin Phoenix and Gwyneth Paltrow; Steven Soderbergh’s $60 million Spanish-language “Che” double bill, starring Benicio Del Toro; and Charlie Kaufman’s $15 million “Synecdoche, New York,” starring Philip Seymour Hoffman as an obsessive theater director, are seeking distribution.
A grim reminder of today’s dicey market climate is Cannes’ closing night pic “What Just Happened?,” which failed at Sundance to score a buyer willing to pay anything close to the $20 million that seller 2929 Entertainment plowed into it.
“They’re still in a mourning period,” says Howard Cohen, co-prexy of Roadside Attractions, who’d happily acquire the film for a fraction of that sum. “Its value is not in relation to its cost.”
The films that sashayed into buyer’s arms at Sundance were micro-budget critics’ faves from tyro helmers, such as “Ballast” and “Frozen River,” that didn’t scare distribs away.
While 2929 may recoup some much-needed prestige when “What Just Happened?” screens as the closing-night offering at the Cannes Palais, the pic will likely be released through 2929’s specialty distrib Magnolia Films. But the film points to a disturbing trend for the specialty acquisition market: the rise of mid-range projects that cost too much to release in a limited fashion.
Hesitant players on the Croisette recall James Gray’s “We Own the Night,” the Mark Wahlberg-Joaquin Phoenix cop drama that Columbia Pictures bought last year at Cannes for $11.5 million. Upwards of $20 million was likely spent on advertising and prints. The film opened in 2,362 theaters on Oct. 12 on its way to grossing only $28.6 million domestically.
Even with its Oscar noms, Miramax’s triumphant $3 million Cannes buy last year, the Cannes director’s prizewinner “The Diving Bell and the Butterfly,” earned only $6 million domestically.
The sellers are trying to put a good face on lean times. “At the end of the day this Sundance will have been less profitable than the previous Sundance, but we’ve got more of a 52-week business than we’ve ever had,” says Cinetic’s John Sloss, who had brought a whopping 19 films to sell at the January fest, including “What Just Happened?”
“I debate on a daily basis whether we should have taken it to Sundance. The bloggers and press outlets had it in for the movie. It had a big bull’s eye painted on it.” Cinetic says they sold every film but one, with several on the verge of closing.
Most sales agents prefer to sell at a higher price in the heat of the moment, because they know that post-fest prices tend to drop as time goes on. Between Sundance’s start and now, some 25-30 films have sold, with more deals still in the offing.
“It’s not in the best interest of a film that its shelf life is a week,” insists one agent. “Filmmakers spend years making these movies and they all have the patience to wait a few weeks. There are movies we could have sold at Sundance for a smaller amount but we waited and we’ll sell it for quadruple that.”
“We’re used to having a bidding war over deals,” says William Morris sales agent Cassian Elwes, whose team took eight films to the fest, three of which sold in Park City. “And those films that didn’t sell in the heat of the moment have all gone on to good homes.”
Looking back, Sundance buyers may have had a case of the jitters, and were afraid to step up and make a public splash. “It’s overblown to say that the market has changed radically, which is something I’ve been hearing since Sundance,” opines Rich Klubeck of UTA, which sold four out of its five fest pics. “Financiers seem to think that the lesson to be learned is, ‘don’t count on studios to pick up finished films for domestic.’ ”
UTA sold “Choke” for $5 million and “Phoebe in Wonderland” (with Endeavor) for $3 million; “Sleep Dealer” and “American Son” went to Maya Releasing and Starz/Miramax, respectively, for more modest sums. Endeavor brought six films and sold five, with the sixth deal said to be imminent. Smaller agencies, like Submarine’s Josh Braun, teamed with bigger firms on sales like “Roman Polanski: Wanted and Desired,” “Red,” and “Man on Wire,” among others.
CAA’s film finance group took 15 films to sell, including “Hamlet 2” and sold 12. One rep called it the agency’s “best Sundance ever.” But anticipated sales of buzz pics with name actors, Playtone’s “The Great Buck Howard,” starring John Malkovich and Emily Blunt, and Groundswell’s “Mysteries of Pittsburgh,” starring Peter Saarsgard, didn’t happen.
The question of this year’s Cannes will be: who’s going to step up for the bigger titles? Miramax Films and Fox Searchlight are coming off a strong year, and can afford to gamble, although neither is starving for product.
Focus Features paid $10 million for “Hamlet 2” and may not be in the mood for another big buy, and Sony Pictures Classics is allergic to overspending. In the wake of Warner Independent Pictures and Picturehouse’s demise, it’s uncertain what Warners’ plans are for acquiring specialty titles.
New companies Overture and Summit arguably need product, but may not want to take a walk on the arty side.
On the other hand, Overture’s Toronto Fest buy “The Visitor” is one of the brighter lights in the spring specialty box office. “Opening movies now is such a different ball game,” says one studio specialty exec. “There’s no two ways about it.”
Source: Variety
