At AFM, buyers hope weak buck pays off
EmptyThe weakened dollar and a plethora of quality global movies on offer at this year's AFM is foremost on the minds of buyers and sellers from the five main territories in Europe -- the U.K., Germany, France, Italy and Spain -- as this year's market gets under way today in Santa Monica.
For anyone traveling from Europe, the cost of going is dramatically reduced, attendees agree. But the question on everyone's lips is, will savings generated by the weak dollar be passed along to buyers in deals struck here?
Nick Hill and Peter Naish, co-managing directors of U.K.-based and U.S.-owned Capitol Films, have assembled a big sales slate of projects with top names expected to command high prices.
"We're making the films in dollars, and we're selling in dollars, so it is dollar-for-dollar pricing," Hill said. "The (weakened) dollar is harder for a company like ours if the costs for a film are in euros or sterling. But the one area where (a weak dollar) does make a difference is in terms of our expenses."
Germany's Sola Media managing director Solveig Langeland thinks that the weak dollar "means it is now a lot cheaper to fly to L.A. and attend the AFM."
He added: "We are still trying to do euro deals, but it is a case-by-case situation. Of course, no one is going to pay a 40% markup because of the weak dollar. But there are a lot of territories outside the U.S. where the dollar exchange isn't an issue."
Markus Zimmer, managing director of German giant Concorde Filmverleih, thinks a weak dollar is better than a strong one for buyers.
"But the decision to buy is still driven by the product, by the stories, not by the exchange rate. Still, it is a welcome development because, at least in Germany, the prices on the other side -- the television channels, theatrical distribution and so on -- haven't gone up," he said. "The competition is fierce, and everyone is putting pressure on prices. So it is nice to have some relief on the acquisitions side."
Said Nicolas Esbach, executive vp international sales and acquisitions at France's TF1 International: "We have to adapt our asking prices to each market, taking into account the weakened U.S. dollar. We just adapt our prices to the different currencies. The worst is when we've signed a few months ago, but the companies have to pay now, so of course we lose money."
French outfit SND/M6 CEO Thierry Desmichelle said: "The dollar doesn't really have an impact on our purchases because, on one hand, the costs rise accordingly, and on the other hand, we place value on film projects according to our market. The change is simply a question of conversion."
It also comes down to the currency you're working in.
Sesto Cifola, director of Italy's RAI Trade, suggests "that non-U.S. products will have higher prices, so it's negative for the AFM. I make contracts in euros, but if they wanted to do a contract in dollars, the prices would have to be higher."
Medusa Films acquisition chief Faruk Alatan said: "This year, we will go to AFM with more buying power than in the past."
Weak dollar or not, the market at home is difficult for Spanish reps.
Spanish production and sales house Filmax chairman Julio Fernandez said: "The falling value of the dollar hasn't made that much difference to us as far as sales at AFM are concerned. But because the market in Spain is weak these days, we are going to buy with a lot more care."
Barcelona-based Vertice Group's Adolfo Blanco, who oversees activities for distributors including Manga and Notro Films, said: "For us, the weakened dollar certainly makes it easier to buy films. But this hasn't really affected our acquistion strategy, because you never know whether the value of the dollar is going to change and could affect a pre-contract for two years from now."
Everyone, however, is anticipating a busy market.
"AFM is still a very important market for us," Hill said. "As with most markets, the important thing to remember is that the quality of the market is determined by the quality of product you have to sell. For Capitol, there is product coming onto the slate all year around."
Naish agreed. "I've always thought that AFM is the single most important business-to-business market there is," he said. "All the key players in all the key markets will be selling to all the key buyers there."
Added Langeland: "If you have English-language product and commercial product, it is definitely a must-attend. The real art house, foreign-language sales agents don't need to go."
But Langland also offered a word of warning. "It is still very U.S.-focused, but a lot of what's at the AFM is very bad U.S. product -- a lot of bad horror films and such," he said.
"It isn't just U.S. product -- Asian films are very well represented at the AFM and have been for years. But it isn't the market for traditional European cinema," he added, because "the big European sales companies prefer to show the new stuff at Cannes or Berlin, because of the connection (in those markets) to a major festival."
Added Esbach: "The AFM is a really a global and world market. I'm not going there saying, 'I'm going to sell to the U.S.' I'm going there saying, 'I'm going to sell to the world.' The U.S. is just one country among all the others."
Blanco agreed. "The AFM continues to be very important for both buyers and sellers, and it certainly is more global now," he said.
Time will tell just how global over the coming days.
Scott Roxborough in Cologne, Germany, Ben Jones in Barcelona, Rebecca Leffler in Paris and Eric J. Lyman in Rome contributed to this report.