AFM Dealmaking Slows as Sales Outfits Try Out Financing and Production
With few of the multimillion-dollar transactions that traditionally add life to the market, international dealmakers say the slow death of mid-budget fare is creating a very uncertain future for the indies: "We all have to adapt."
The scariest thing about the 2017 American Film Market isn't the schlock horror on offer at sales booths, but the eerily empty corridors of the Loews Hotel.
AFM Central is usually packed with industry players and wannabes, the crowds of cheap suits and hairpieces that give this market its special charm. This year, some hallways seem so abandoned you half expect a little boy on a Big Wheel to come cruising by, a la Stanley Kubrick’s The Shining.
Big deals are also thin on the ground. Netflix’s global buy (outside China) from Bloom/Endeavor Content for sci-fi title Tau, featuring Maika Monroe and Ed Skrein, and Paramount’s $10 million pickup of North American, U.K. and French rights to June Pictures’ Book Club — a comedy to feature an all-star cast including Diane Keaton and Jane Fonda — have been the headline grabbers so far, despite being minor by AFM's historical standards.
But those standards are changing. While the market used to have a dozen or more mid- to big-budget films with A-list stars on offer for foreign buyers, these days it’s hard to find more than a handful. And the ones out there don’t tick all the boxes for mainstream appeal. Bloom’s The Front Runner has the star power of Hugh Jackman and the track record of Juno director Jason Reitman, but its subject matter — the sex scandal that toppled 1980s American politician Gary Hart — is not an obvious sell for international distributors. Voltage’s Extremely Wicked, Shockingly Evil and Vile has the blockbuster appeal of Zac Efron and Lily Collins and a Black List script from Michael Werwie, but the concept — a PG-13 comic drama about infamous serial killer Ted Bundy — makes it a risky bet for mainstream players.
"In a word — disappointing,” says Alex Janssen, head of international acquisitions at German distributor Universum Film. “There aren’t any of the big mainstream films that we’re interested in. We hope next year we’ll see an upswing, a readjustment. But we all have to adapt. Every distributor in every country has to adjust to the new market realities.”
Eyes are on Global Road Entertainment, Donald Tang’s would-be mini-major, to bring some energy back to the business, especially since bringing on former Lionsgate topper Rob Friedman to run things. But developments point to an increasing bifurcation of the business, with a few big players — STX, Lionsgate, Bloom, FilmNation — at the top, a mess of straight-to-VOD companies on the bottom and the middle squeezed out.
To avoid being in that middle, many sales outfits are pushing into production, developing and financing the films they offer. “Everyone wants to become a production company with an international sales arm because straight sales companies are on the way out,” says one veteran buyer. The Exchange CEO Brian O’Shea made the shift recently, kick-starting a development slate that includes the rom-com Septillion to One. “It was great we actually made that move,” says O’Shea, “but true development — oh, my God, it takes forever and it’s a long burn. You need a long time to commit to it.”
But in the current market environment, owning the movies you sell looks like a corporate strategy with a future — as seen by the likes of FilmNation, which helped finance and produce such hit indies as Arrival and The Big Sick. CEO Glen Basner warns, however, that it’s not a business everyone can, or should, be in.
“Right now, you hear everyone talking about moving into production because they can’t find movies to sell,” says Basner. “I don’t know that that’s the best reason to get into the production and financing business. For us, it was always about having a greater voice in the creative process so we could get the sort of films made that people around the world will go to the movies to see. And then, with success, capturing a greater portion of the upside for our company.”
This story first appeared in The Hollywood Reporter's Nov. 5 daily issue at the American Film Market.