2007 looked like a good time to launch a large-scale film production company. But just as Film Department chairman Mark Gill and vice-chairman Neil Sacker raised considerable funding, the indie market hit the skids with the recession. With more than one bonafide hit beyond $40-million Gerard Butler vehicle Law-Abiding Citizen (Overture domestic, $133 million worldwide) to balance a slate of uncommercial movies–from $16.8 million The Rebound to $16 million cancer romance A Little Bit of Heaven, neither of which saw stateside release –the company might have survived. But finally all the money they made went to their investors, and by the time they faced the music and tried to refinance, it was too late. (Deadline ran early with Gill and Sacker’s press release packed with financial details.)
The company will shut its doors on May 27, and Gill and Sacker will try to buy back some of the ten titles owned by their foreclosing lenders, Gill told me. They believed that they could make movies for half the price the studios would pay for them. But unfortunately, the studios stopped buying. Next time, Gill admits with 20-20 hindsight, he’d line up distribution in advance. The market switched on them. “All the cash was swept off the table by the lender,” says Gill. “We weren’t able to put it back to work. International distributors were paying nine months late. We were debt free and cash poor.”
Compare The Film Department to Michael London’s Groundswell. Gill, smarting from his ouster at Warner Independent Pictures, wanted to prove something: he was building a big label that would supply five to six movies a year. He and Sacker collected hefty salaries and supported a sizable staff, reduced from 28 to 11 by the end. While London started big, he swiftly caught the tenor of the times and bought out his investors and pulled back to a smaller entity. Groundswell was able to sell all its modest-budget films to distributors. They aimed for quality with such films as Oscar-nominated The Visitor and Milk and current release Win Win. They are squeaking by.
Meanwhile Gill got caught not only in the worldwide credit crunch, but in the foreign film trap, putting together movies starring foreign-friendly Catherine Zeta-Jones (The Rebound) and Kate Hudson (A Little Bit of Heaven), who can pull hefty advances from international territories. “Foreign sales worked well for us,” says Gill. “It covered a large percentage of budgets on our movies.” But that kind of filmmaking is a recipe for less-than-ideal movies. And no one was buying.