The record-breaking Apple Studios acquisition of “CODA” is still creating anxiety weeks after the Sundance Film Festival ended. The fear isn’t that streamers’ deep pockets will make it impossible for others to compete, although that’s certainly a possibility. The “CODA” angst belongs to a much larger question: How can Apple hold all worldwide rights to a film that’s already sold to territories all over the world?
When Apple bought worldwide rights to Sian Heder’s “CODA” for $25 million January 30, the financiers planned to make buyback deals with those rights holders. Nordisk Film, which pre-bought the rights nearly two years ago, confirmed to IndieWire that the company still plans to release the film in the Nordics. Nordisk isn’t alone in that in stance.
Many Sundance films come to the festival with all rights available — indie films can be a tough sell overseas as well — but “CODA” is the remake of an award-winning 2014 French film, “La Famille Bélier.” Financing on “CODA” came from French companies Vendôme Group, Pathé, and Patrick Wachsberger’s Picture Perfect Entertainment, but territory presales on “CODA” were crucial in getting the $10 million film made without a US distributor. Those international distributors participated in a bedrock strategy of independent film: Take the risk up front for the potential reward of a hit title.
Sun Distribution Group, which bought “CODA” for Latin America, was nonplussed by the Apple buy. “If we begin to accept this idea [of mandatory buyback clauses] we’d go out of business,” Sun executive director Ricardo Costianovsky told THR. “It would mean taking all the risk on flops and capping our upside on hits.”
Andrea Goretti, CEO of Italy’s Eagle Pictures, told Variety that he received a call from Pathé February 1 inquiring if the distributor would be willing to sell back Italian rights. In short: Nope. Not only did he still plan to release “CODA” for Christmas 2021, he’s already sold Pay TV and free TV rights in Italy. Eagle Pictures holds Italian rights on “CODA” for 20 years. Said Goretti, “We have no intention to give back these rights now.”
Global streamers like Netflix and Apple TV+ generally prefer to buy worldwide rights, although there are exceptions. At the 2021 European Film Market, Netflix paid $18 million for the Liam Neeson title “The Ice Road” — US rights only, since Neeson action films are a hot property and the film was already sold in territories all over the world. Similarly, Netflix bought “Operation Mincemeat” starring Colin Firth, but for North American and Latin American rights only; deals made in other territories remain intact.
“The big mistake [on “CODA”] was nobody ever called these distributors before the Apple deal was announced,” said a US theatrical acquisitions executive. “Apple wanted that headline. They wanted to show the world they were in the content business in a big way.”
An Apple representative declined to comment. Reps for ICM and CAA, which represented the filmmakers in the deal, did not return requests for comment. All stand to lose from this transaction. The $25 million deal was meant to cover more than 100 countries where Apple operates its growing Apple TV+ service. The more distributors who hold out in ceding their rights, the more the price drops.
For now, it’s unlikely that buyback clauses and kill fees will become the norm in distribution contracts; Hollywood agencies and streamers don’t hold unilateral power. In the rapidly changing world of exhibition, however, flux is the rule and the industry will continue demanding reevaluation of business norms.
“We need to figure out how we transact with each other so all stakeholders can continue to participate in success,” said one US sales agent and financier. “We hope and expect that there is going to be a great deal of productive and thoughtful conversations over the next year about how we are going to reimagine the way we’re all doing business together.”