Cannes 2012: Euro Crisis Casts Shadow Over Market
Economic woes could lead to downturn after last year’s record dealmaking.
While all sides predict a good Marche du Film, there are big pressures facing buyers and sellers, including a flood of new sales companies and a dramatically weakened Euro.
The foreign sales business has hardly been easy over the past decade, but some recent markets — including last year’s Cannes — saw prices return to boom levels as distributors rushed to buy into studio-level projects such as Focus Features International’s Cloud Atlas and Sierra/Affinity’s Ender’s Game.
“We’ve worked hard to build a company, and we’re in a good spot. But everyone has to be on their game. This business is demanding and requires you to be really focused and disciplined,” said Sierra founder and CEO Nick Meyer.
There’s no shortage of A-list product at the market in Cannes, but IM Global CEO Stuart Ford cautions that financial troubles in Europe could dampen business.
The Euro has been steadily falling since March and hit a sobering $1.28 on Tuesday. Since market deals are done in American dollars, a weakened Euro means European buyers will have less wiggle room to negotiate.
The good news continues to be emerging markets, including Russia and Brazil, where the box office is exploding and buyers are opening their wallets. China also is a boom territory, although the Chinese aren’t big buyers at Cannes and other markets.
Unlike Cannes last year, 2012’s market is defined by a slew of mid-range projects, versus four $100 million-plus titles in 2011. Foresight
Unlimited got the year off in Berlin racking up nearly $60 million in sales for Denzel Washington-Mark Wahlberg starrer Two Guns.
But sellers beware: some buyers believe they’ll have the upper hand because new companies will be keen to quickly establish a firm foothold.
“This year, we have more companies than films,” said Alexander van Dulmen of east European distribution group A Company. “I think it will be a buyer’s market because so many new firms are looking to make their mark and there is no one must-have film out there.”
Two of the new sales ventures were borne out of the Lionsgate-Summit merger – David Garrett and Constantin Film’s Mister Smith Entertainment and Joe Drake and Nathan Kahane’s Good Universe. Garrett headed Summit International with Patrick Wachsberger, while Drake’s Mandate Pictures was snapped up by Lionsgate in 2007. Both Drake and Garrett departed the two respective companies in the wake of the merger.
Megan Ellison’s new sales firm Panorama — headed by veteran Lisa Fox — also will be on the ground in Cannes, as will Will Clark’s new U.K. company Altitude. Other sales operations launched over the last year include Red Granite, Aldamisa, The Solution Group and Radiant Films.
They’ll go up against companies that only a few years ago launched and redefined the landscape amid similar economic turmoil — among them Sierra/Affinity, IM Global, FilmNation and Exclusive Media. And there’s the old guard, such as Europe’s Studiocanal and Wild Bunch, and U.S. regulars including Lionsgate and Focus International.
Many of the newer outfits have moved into financing and producing mainstream, star-driven movies that used to be the sole purview of the studios.
As the market gets underway, all eyes will be on where the pendulum swings over the next 12 days.