Creative Space

VMI Boss on Not Overstretching and Preselling Nicolas Cage

Courtesy of Subject
"I’ve seen a lot of companies crash and burn because they made the wrong investments in one movie," says VMI CEO Andre Relis.

VMI Worldwide CEO Andre Relis also discusses the importance of taking risks and the indie world's "thin margins.”

With titles like the Nicolas Cage-Kelsey Grammer thriller Grand Isle, the Vince Vaughn- Liam Hemsworth crime drama Arkansas and the Aaron Eckhart- Tommy Lee Jones conspiracy thriller Wander on its slate, VMI Worldwide might seem like just another banner selling mid-range genre wares at AFM in Santa Monica. But VMI’s story is different than most.

In the late 1990s, company CEO Andre Relis was a singer in the punk band Rubberneck and struggling to hold down a regular job because of touring. But he was invited by his record-label boss to become a production assistant on several shows the company was making for Fox Sports. Since then, he’s climbed the ladder, transitioning into distribution and then sales with stints at Highland Crest Pictures, Troma Entertainment, Lionsgate and Vision Films (where, sadly, he had to give up punk when he became a partner in 2003). He branched out on his own in 2010, launching VMI, which he’s grown to incorporate not just sales but financing and production.

Speaking with THR, Relis, 44, talks about the importance of taking risks without overstretching and why Cage’s rather prolific acting schedule means he’s difficult to presell.

You launched less than a decade ago, but much has changed in the industry since then. How have you managed to weather the storm and grow the company?

One of the reasons I split from the partners at my previous company was that they didn’t want to take any risks or produce or put up guarantees. And I realized that in order to grow in this business, that discussion needed to be taken. So in 2010 I started this company with a mandate: We’re going to be a sales agent, but we’re also going to be a producer and put up money and do whatever we can to support films so we can grow. In 2011, we went to Cannes with our first presale; it was a Dolph Lundgren movie [Blood of Redemption], $1.5 million. We presold the entire budget at that one market. But you can’t do that anymore. As far as the presale market goes, you’ve got to have bigger films that can play on multiple platforms. And because of that, I’ve had to get into much bigger-budget films and take bigger risks.

How do you make the numbers work these days, given that theatrical releases for genre films are hit and miss, DVD is largely dead and TV isn’t buying what it used to?

One of the things that we do to minimize risk is to make sure that the cast is sellable at the level in which we're putting up an investment. And luckily, we've been successful. We haven't lost money on any of our movies. Because we’ve been careful. We’ve had to watch out for certain projects that come to us where, hey, it has a great cast but the genre is not sellable. Or there’s something about the project that’s too risky. You can't make that big mistake. And I've seen a lot of companies crash and burn because they made the wrong investments in one movie. Look what happened at New Line with The Golden Compass. 

So what type of budgets makes sense in today’s market? Where’s the price point where it becomes just too risky?

I used to say it was too risky at $6 million to $8 million. But I’d hate to put out a blanket statement that says anything above a certain level is too risky, because it’s really subject to your cash in the project. We used to be in the $1.5 million to $2 million range; that was our comfort zone for many years, and we’re still playing that field. But I think, as far as our company is concerned, I wouldn’t be comfortable at anything above $10 million. 

What sort of margins are you looking at if a film does well?

I’m not going to lie, the margins in this business are thin. So it’s also about volume. You have to have a certain number of pictures per year that you’re working with, because the margins are small. If you don’t have enough, it’s hard, and I have a staff of seven. So we average about 10 films a year. I’d say six or seven of those are just acquisitions, or we’re acquiring worldwide or just foreign rights, and the other three are films that we’re producing.

Is it always important to you to have one recognizable name in your films?

Absolutely. If we're investing in a movie, there are three pieces that need to work. One is cast, two is director, and three is genre. I’d love to have a movie where I wasn’t worried about the cast and could just fall back on the director. But when we’re taking risks, we need to minimize this risk by the cast.

Speaking of cast, you’ve had a couple of films starring AFM favorite Nic Cage. Given that he seems to make quite a few movies each year, are they still profitable?

Yeah, Cage has done a lot of movies and oversaturated the market a bit. But if you get the right film with him, it’s still very sellable. We did a movie called The Humanity Bureau a few years back and had a lot more success preselling that than we did with our latest movie, Grand Isle. But once we completed this movie and sent it out, we had a lot of success. So my take on Cage is that he’s harder to presell in this day and age, because he has done too many movies, but if you get the right movie, it still can work well.

Where do you see VMI in five, 10 years time? Are your budgets going to be creeping up?

Absolutely. I think that's just the natural progression of what happens. And I think that we're going to really move more into theatrical space and into joint ventures with digital platforms, with Netflix, Amazon, Apple. And also heavily building our home entertainment division so we can release our own pictures as we choose to. In five to 10 years, we're going to be a $50 million business. I’m pretty confident in that. But I'm going to have to be very careful about the steps we make, because it's baby steps.

Interview edited for length and clarity. 

This story first appeared in The Hollywood Reporter's Nov. 7 daily issue at the American Film Market.