Deep product fuels big deals
Studios' aggressive buying puts pressure on everyone elseA wave of aggressive acquisition activities from studios led by divisions at Sony, Universal, Paramount and the Walt Disney Co. rolled across this year's Festival de Cannes titles and Marche du Film projects, while players from the overseas indie financing world frolicked in its wake.
Big multiterritory deals struck by divisions like Universal Pictures International, a slew of deals struck by Sony's units and a visible hunger at Paramount paid lip service to market opinion that the pool of desirable product was deep this year.
Summit, which landed on the Croisette with one of the most sought-after slates it has ever presented, found itself trumpeting its own $100 million-plus sales success.
So confident in its own ability to raise financing without having to conclude a North American sale, coupled with a desire to hold onto hot properties that could feed its freshly launched distribution business stateside, Summit has, according to buyers, been turning offers away on titles like "Pompeii" because it can raise the production financing solely from overseas.
"There are a lot of movies and a lot of money out there. Look at all those boats," Summit Entertainment president Patrick Wachsberger said. "A lot of movies shouldn't be made just because there is so much money out there. We have to be careful about what we produce."
But aggressive studio buying puts pressure on everyone else.
"For the big titles, you often find you are competing with the studios because they are doing multiple-territory deals," German indie Constantin Film acquisitions chief Yoko Higuchi said. "Often a seller will go with a studio because they can obtain more money for multiple territories than with a single-national independent."
But the bean counters noted that financing on big-budget projects is increasingly available — and targeted outside the old-fashioned need for a U.S. deal — to mean the difference between a picture surfing or not.
Senator Entertainment chief creative officer Marco Weber, whose Berlin company financed and produced the Julia Roberts starrer "Fireflies in the Garden," said speed is essential.
"European independents like Senator with certain resources have a distinct advantage over these studios in that we can move very fast," Weber said. "When a project is ready, we can greenlight it immediately. We have the luxury of being able to wait until the picture is finished before doing a U.S. deal, so we can get better terms."
British-based finance and sales house Capitol Films, snapped up by Los Angeles-based entrepreneurs David Bergstein and Ronald Tutor last year, spent Cannes adding names like Jennifer Lopez to projects to whet buyers' appetites.
Capitol general counsel Hannah Leader said in an interview that there was more international cash available than ever but added that the problem was that while the talent pool remained largely static in terms of the handful of internationally recognized names, the prices demanded to sign for projects was rocketing upward.
"The problem is not financing the films, the problem is casting them," Leader said. "Last year, getting someone to commit might have cost $300,000, but this year people are asking for $5 million. And they're getting it. But everything is cyclical, so I am sure that will change again."
The scent of money in the air, she added, was because of the tax and state incentives to shoot in the U.S. as well as the plethora of private-equity cash available and international financiers queuing up to take on risk for high-end projects with talent attached.
Oscar-winning producer Graham King ("The Departed") launched his own production banner GK Films, secured a three-year, first-look deal with Warner Bros. Pictures and reupped his existing production deal with Johnny Depp's Infinitum Nihil (HR 5/22).
King is raising all the cash for his first GK banner project — Jean Marc Vallee's "The Young Victoria," starring Golden Globe winner Emily Blunt — from international sources.
"Buyers need more information — screenplays, cast and a longer prep time — because of the sheer number of new projects and competing films in their market," Robbie Little of the Little Film Co. said.
Italy's Max Pictures CEO and founder Max Alvarez said his company is putting together a $70 million film called "Speed Kills" and is considering seeking studio funding, though it's also prepared to go it alone.
"The big advantage of staying independent is that you control everything. But a studio can bring more than just money. It's expertise and connections," Alvarez said. "I think any independent studio has to weigh the pros and cons of each side and figure out what's best. You can make the argument either way."
Gregg Goldstein, Eric J. Lyman and Scott Roxborough contributed to this report.