Cannes: Why Sales Agents Are Forced Into Producing Movies
Amid drastic shifts in dealmaking, sellers now are backing projects from the ground up. Says one insider: "The middlemen are being squeezed."
Most would agree that the international sales model ain't what it used to be. Shifts in the film business — including the ascendance of Netflix and advances in technology that allow filmmakers to handle their own dealmaking — are changing the traditional role of the sales agent.
Many sales companies are adjusting to the fluctuating market by getting involved with projects from the start as co-financiers or producers. Just ahead of Cannes, for instance, The Exchange announced that it would be launching a production division led by producer Tom McNulty (The Spectacular Now, Date Night). "We are focusing on production to create/own our IP so it gives more value to the company," says Brian O'Shea, CEO of The Exchange. "With IP, we own more of the backend, and not just as a sales agent with distribution rights."
As more and more sales companies delve into producing, industry experts cite Good Universe, Sierra/Affinity and FilmNation as companies that wear multiple hats best.
FilmNation, for example, will sign on to a project in whatever role works in order to be involved in something its execs see promise in. (The company co-produced Arrival and The Founder but fully financed the upcoming comedy The Big Sick.)
When producing, it's a plus to have a sales department in-house, says Tara Erer, senior vp sales at FilmNation. "When we are reading something, I can look at it from an international sales point of view and say, 'OK, we can get this much,' and then that will shape the financing of the picture for us, which is a huge benefit. You are shaping a film that will in a way give you the best product."
London-based sales banner Protagonist Pictures also is expanding into production and financing, with Charlie McDowell's sci-fi drama The Discovery serving as its first co-production (it debuted March 31 on Netflix). The company, which is aiming to eventually develop three to five projects in-house per year, finds itself in a new situation in the tough development market.
"The competition out there for projects has become so intense when it comes to good scripts and good material," says Protagonist CEO Mike Goodridge. "Sometimes we find ourselves up against our own clients."
Goodridge expects this trend of sales companies expanding their roles to continue. "It's inevitable for sales and finance companies to get into their own productions," he says, "and I think it's going to be a survival of the fittest story. We are at a point in the business where traditional middlemen are being squeezed. You have to adapt to the new realities."
This story first appeared in the May 10 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.