Buyers market looms at AFM
Global economic woes will impact sale prices, but deals should get doneThe global financial crunch is likely to claim its first victim among the worldwide film and TV confabs as the American Film Market opens today amid an air of extreme caution, with buyers facing a glut of unsold movies from which to cherrypick.
IFTA executive vp Jonathan Wolf, whose organization runs the market, likened the situation to "a lifeboat with too many people in it."
Presales deals are likely to be strongly impacted by the availability of so much product, buyers and sellers said.
While on paper the strengthening dollar makes presale prices look more realistic for overseas buyers because budgets are generally drawn up in dollars, prices will be lower.
One international buyer was rubbing his hands with glee at being able to call the dealmaking shots. "It's a buyers market, if you ask me. There are a lot of films needing a home, and buyers are all being very cautious with their money."
Added one financier: "The main thing for sales companies to remember is there has to be a realistic level in prices. With the right cast and the right price, deals will be done."
Market figures will fuel fears. A total of 1,022 films completed in 2008 are on offer at AFM, which Wolf believes is a record for the market.
Among the numerous completed titles vying for buyers' attention are Odd Lot International's Holocaust drama "Good," starring Viggo Mortensen; IM Global's Bill Maher doc "Religulous"; Myriad Pictures' thriller "The Cry of the Owl," starring Julia Stiles; QED International's "W."; and NuImage/Millennium's cop drama "Brooklyn's Finest."
Most of the hottest titles have yet to be filmed or completed, including the Weinstein Co.'s all-star musical "Nine"; Focus Features International's drama "Agora," starring Rachel Weisz; Mandate International's action comedy "Men Who Stare at Goats," starring producer George Clooney; and the Film Dept.'s thriller "Law Abiding Citizen," starring Jamie Foxx and producer Gerard Butler.
Other markets that came earlier in the year — MIPCOM, Toronto and a business-as-usual Cannes — escaped the then-looming economic turmoil. In fact, those markets were fairly vibrant despite naysayers' predictions of a downturn.
But that scenario might shift at AFM as the industry faces down the early waves of the economic tsunami.
Even the usually optimistic Wolf thinks prices might be soft for his members. "If you look at this as a pendulum, you see too much product and so prices are soft," he said. "When it swings the other way with too little product, prices are high — you want that pendulum to be at an equilibrium. Right now, we are on the high side with a glut."
Former Weinstein Co. and Focus Features veteran Glen Basner concurs with Wolf, adding: "A lot of films may be available, but if they're good they can command a terrific price. It's the ones situated in the middle that will be treated like a commodity."
He adds: "If people don't see a significant difference between a group of them, then they are likely to make decisions based on where they can get the best deal. Those not selected immediately are the ones that will get killed. It used to be titles had value even if they just went straight to video. Now, if films don't get a theatrical run, their value drops precipitously."
Despite the gloom, many sellers remained positive on the eve of the market.
Veteran sales and financing executive Guy East — who arrives in Santa Monica as the chairman of the freshly launched Exclusive Film Distribution selling titles from Los Angeles-based Spitfire Films and London-based Hammer Films — is confident about doing business.
"Early indications from buyers we know well lead us to expect a very enthusiastic response despite the current financial climate," East said.
For his part, Wolf believes that the failing global economy ironically might contribute to a shift in the market through reduction of government film funding in many countries — possibly even the abolition of benign film taxation clauses.
The pressurized state of the market appears not to have impacted overall attendance, which Wolf expects to run at about the same levels of the past few years.
"We have seen nothing that would indicate that what is going on in the global world has affected attendance, and I don't think it will impact the number of feet on the ground. But will those feet be making acquisitions? We will find out in the coming week."
Gregg Goldstein contributed to this report.