Once upon a time, distributors had the luxury of waiting to see how a movie played at a festival before plunking down their cash on a big minimum guarantee. Unless it’s a tiny foreign art film, those days are over.
It’s a question, as always, of supply and demand. There are plenty of low-budget indie movies available, but higher-quality, mid-budget, more commercial fare aimed at general audiences is hard to come by. And so in recent years the market has radically shifted. Now companies have to buy at earlier stages, hoping to affect the productions to a degree, but mainly they have to place their bets ahead of the competition.
The great reveal at Cannes — the most surprising buy of all — was STX Entertainment acquiring international rights before production had even begun of Martin Scorsese’s “The Irishman” in the Cannes market. No footage. Scripts have been passed around, not final. Just a handful of semi-attached major movie stars —Al Pacino, Harvey Keitel, and Robert De Niro, who was saluted by the festival Monday night with a screening of Weinstein Co.’s mainstream Roberto Doran biopic “Hands of Stone,” co-starring Edgar Ramirez—and auteur Martin Scorsese directing a mob hitman script by Oscar-winner Steve Zaillian (“Schindler’s List”). And this was on top of paying $9 million for U.S. and foreign rights to Aaron Sorkin’s directorial debut, poker movie “Molly’s Game,” starring Jessica Chastain and Idris Elba.
Scorsese’s rambunctious Leonardo DiCaprio comedy “The Wolf of Wall Street” was such a big hit worldwide ($392 million) that in a heated bidding war against major studios, rising studio STX Entertainment acquired international territories on the film for $50 million.
It’s not unusual for a studio to sell some foreign markets on a project that they consider too risky to take out themselves all over the world. But to give a $75-80-million movie with major stars to a foreign sales company (Mexico’s Fabrica de Cine) to put up for auction at Cannes? It was Fabrica’s Gaston Pavlovich who convinced Paramount’s Brad Grey to structure the international sales deal, when he wasn’t going to greenlight the movie via conventional means. That is rare.
Is STX the new kid on the block trying to make a big splash? Other studios were in the same bidding neighborhood. Notably, one of the studios that did not land the picture was Universal (along with Fox and Lionsgate). STX motion picture chairman Adam Fogelson, who used to run Universal with Donna Langley, and left that studio before he was ready —ahead of their banner 2015— has been working hard to build STX into a new model modern nimble studio. He poached Universal’s international exec David Kosse (who also bought “The Wolf of Wall Street” for a high price) to run his international operation. Now, STX has a marquee picture to supply to its output deals, and will release the film in the UK via its new distribution company.
While STX got started with some hits (Joel Edgerton’s $5 million thriller-turned-$44 million-hit, “The Gift”) and duds (“The Secret in Their Eyes”), their upcoming slate previewed last CinemaCon in April looks robust, from raunchy comedies “Bad Moms” starring Mila Kunis, Kristen Bell and Christina Applegate and James Brooks-produced “The Edge of Seventeen,” starring Hailee Steinfeld, to Gary Ross’s potential awards-contender “The Free State of Jones,” starring Matthew McConaughey as a rebel Civil War soldier.
Green-lighter Fogelson’s cap is $80 million; the company is backed by TPG Growth and other investors, and has pacted with China for co-productions. So why spend this much money? This isn’t a co-production, so China is not a big factor here. No, it’s getting that cast together in an easy-to-sell Scorsese mob movie that will be valuable around the world.
This record buy underscores the trend in the competitive world of film distribution for buyers who are picking up titles even before they get made. More distributors are targeting projects early in the script stage (or even the treatment stage for certain high-profile directors).
In the first week of the festival, Amazon Studios bought two dramas set to shoot in 2017, Lynne Ramsay’s“You Were Never Here,” starring Joaquin Phoenix, for around $3.5 million, as well as Mike Leigh’s $20-million period “Peterloo.” A24 picked up U.S rights to Yorgos Lanthimos’ “The Killing of a Sacred Deer” and David Robert Mitchell’s “Under the Silver Lake” starring Andrew Garfield and Dakota Johnson. Kino Lorber pre-bought the competition film “Slack Bay” at the script stage, with French director Bruno Dumont and actress Juliette Binoche attached. Broad Green acquired U.S. rights to Ron Shelton’s “Villa Capri” in pre-production, starring Morgan Freeman and Tommy Lee Jones.
Lars von Trier’s serial killer narrative “The House That Jack Built” was bought quickly by distributors from Europe, Asia and Latin America, sold by Denmark’s TrustNordisk with California Filmes for Latin America, September for Benelux, Gutek for Poland and Moviecloud for Taiwan. Von Trier hasn’t even cast the movie yet; he’ll shoot in the fall.
Other titles that haven’t been shot yet but are expected to be hot projects at Cannes include “Anon,” from “Gattaca” writer-director Andrew Niccol, “Brawl in Cell Block 99,” from director S. Craig Zahler, and “Film Stars Don’t Die in Liverpool,” to be directed by Paul McGuigan. On top of these, there are roughly 1,500 works in progress and finished films screening at the marketplace.
What’s the driving force behind these deals? Part of the answer is that pre-buying activity that dried up in the wake of the global economic crisis eight years ago is back. The increasingly competitive marketplace for movies, both at Cannes and in general, isn’t specific to U.S. distributors, according to Visit Films president and founder Ryan Kampe. “Projects are being sold to a number of territories that would have never pre-bought before,” he said. “[Historically] they would want to see footage, or the completed film, but when you look at the Cannes lineup, so much is already gone for so much of the world ahead of time that people don’t sit and wait anymore.”
New York-based Visit Films got involved with director Sophia Takal’s thriller “Always Shine” roughly two years ago, at the script stage. The film played at the Tribeca Film Festival last month, where it earned a nomination for best U.S. narrative feature.
This is not to say that projects across the board are attracting pre-sale interest from buyers. “You have to have talent or a director that works in the U.K. to pre-sell in the U.K.,” Kampe said. There are also obvious risks that come with buying a film sight unseen.
Still, distributors can gain an advantage by putting themselves in the driver’s seat at an earlier stage. “If they can do that every time, that means they are ahead of the game in terms of being able to get it out, control their release, and really work that film in a territory,” Kampe said.
While increased pre-buying activity is evidence of a hotter market for titles, that doesn’t mean that indie or specialty titles will fetch higher sums than in the past. “Smaller and mid-size movies aren’t more valuable because the other movies are sold to bigger entities, it just gives them more attention in the marketplace.” Kampe said, adding that there is an opportunity to be had for both directors of smaller films and distributors like Visit. “It may give some newer or developing filmmakers a chance to have more exposure than they would have historically.”
It was clear to distributors prior to Cannes that few available films were playing in the festival. But there’s plenty of upcoming product in the pipeline.
“If we’re submitting a brand new project that’s really only a screenplay, director and actors, and we start shooting in a few months, there’s plenty for U.S. distributors to be active in that realm,” said FilmNation’s Glenn Basner.
More conventional market buys include Weinstein Co.’s North American pickup of “Wind River” starring Jeremy Renner and Elizabeth Olsen, which is in post-production. Saban Films nabbed stateside rights for thriller “The Girl with All the Gifts” starring Gemma Arterton, and John Michael McDonagh’s Berlin premiere “War on Everyone,” starring Michael Pena and Alexander Skarsgard.
Among the titles that have been picked up the old-fashioned way out of the festival for North America are “Toni Erdmann” (Sony Pictures Classics), “Neruda” (The Orchard), “Staying Vertical” (Strand Releasing), and Ken Loach’s “I, Daniel Blake” (Sundance Selects).