What did we learn from the recently wrapped, relatively upbeat American Film Market? Beyond the flashy announcements of sales from companies such as FilmNation, there was also strategic talk of how to move the business forward.
There is more available financing. While the quality of films being screened was just so-so, the usual army of old-school execs and hungry newcomers stampeded beach hotels (amid petitions to stop a proposed move downtown) as the market buzzed with buyers and sellers talking projects on the go. “There was a positive, vibrant energy,” said ICM’s Hal Sadoff. “The market was buoyant compared to the last four years. It felt like it was getting back to the old days.”
After the studios trimmed deals with specialty players, Harvard grad-turned-producer Dominic Ianno, CEO of Indomitable Entertainment (“The Whistleblower”), who works in film, theater and new media, started collaborating with some of that talent. “There are more high-net guys emerging,” he said, “and talk of film funds again which I haven’t heard in a long time.”
Indeed, at lawyer Tom Garvin’s home last week there was word of a new $100 million film fund launching from a Fortune 500 company in New York as well as bargain deals for those wanting to build a library. “Financing still comes down to high-net individuals at this point,” added Sadoff.
After the wave of German funds that swept the market seven years ago, financing a reported twenty percent of Hollywood productions, some companies are now selling off rights to the films; some complete libraries are up for grabs.
Bigger players have the edge. “There is an increasing polarization between the haves and the have nots,” cautions film sales veteran Jere Hausfater. “The haves are getting stronger. You want to be a have.”
Sadoff agrees: “It is definitely a very bifurcated market now with the bigger films selling and a lot of smaller films struggling.” Sadoff’s slate sold well, including Ron Howard’s “Rush” (pictured), “Dead Man Down, Bachelorettes, My Wild Life” and “Penthouse North.”
“The problem is that pre-2008 there were equity investors around and now, unless you are a Summit Entertainment or a Lakeshore or Lionsgate it is difficult to get the financing,” said one buyer. “And look at the value of libraries. MGM’s library was once worth $10 billion. It was refinanced for $405 million in 2005 and the value six months ago was $1.6 million,” he said.
Theatrical business is strong. “Putting the DVD market aside, the theatrical business is still strong in most territories, as is television,” insists Hausfater, who helped Aldamisa International to sell the South African animation film “Jock in 3D,” and was also selling Asian territories on producer Janet Yang’s “Shanghai Calling,” in which a New York attorney sent to Shanghai enlists the help of colorful locals. “Video is good in Germany and the U.K. even if it isn’t in Spain and Italy. To sell something, it has to taste and smell like a theatrical movie.”
Quality sells. “Those with great films are fine but if you don’t have them then you can’t get people in the door,” said Fortissimo Film’s Michael Werner, who believes in pursuing the specialty film route, even if it’s a hard slog. “Not everyone gets a retrospective at MoMA.”
So does cheap genre product. At the other end of the spectrum, Inferno Film Productions (known as the other Inferno), which had two faux flames adorning its door frame at its AFM office, is producing features in the $100,000 to $3 million budget range. They had no less than 26 films at the market. “Prices aren’t what they were a few years ago but you can now sell rights to a larger number of different mediums in each territory,” said the company’s Darlene Cypser. “People are hungry for content and looking for packages again. For a few years people were short on money.”
“Ninety nine per cent of the guys involved in production here missed the target by a millimeter,” says Christian Halsey Solomon, who just launched the digital distribution company Film Domain. “Therefore no one had the must-have film. So it came down to, ‘well, if I can’t have that one, I will have this.’ So it was a good market, but it made everyone feel like they had sex but didn’t come.”