Huffing and puffing over ‘Smoking’s’ undone deal

Director Ivan Reitman walked into an elevator here Sunday afternoon and was embraced by actress Maria Bello.

“Congratulations,” she said. “I hear it sold.”

“It did,” he said, grinning, the proud papa. “To Fox. It’s a good company.”

Reitman and Bello were referring to his son, Jason’s, directorial debut, “Thank You for Smoking,” a satire about a tobacco-industry lobbyist (played by Aaron Eckhart). The film debuted at the Toronto International Film Festival over the weekend and was sold Sunday to Fox Searchlight, Fox’s specialized film unit, for a reported $6.5 million.

Only it didn’t, at least according to Paramount Classics. In one of the strangest deals (or, perhaps, nondeals) in recent memory, Paramount is claiming it purchased the film, or at least purchased it first, which it says amounts to the same thing.

“We bought the film,” said Ruth Vitale, Paramount Classics co-president. “We spent four hours in a room with the producer [David O. Sacks], his lawyer, and our lawyer [on the phone] and hammered out a deal at 5 a.m.”

Within hours, Fox Searchlight saw things differently. In an announcement issued by Fox on Sunday afternoon, the studio quoted Jason Reitman as saying, “Fox Searchlight will be a fantastic distributor for ‘Smoking,’ and I couldn’t be happier that we made a deal with them.”

The dispute over “Thank You for Smoking” raises a timeless Hollywood question: When is a deal a deal?

According to Vitale, Paramount Classics observed the long-standing Hollywood tradition of agreeing in principle to buy the film -- what might in other circumstances be called a handshake deal. Deal points would then be negotiated over the next 48 hours before the contract would be settled. Either ignoring, or not knowing, this custom, Vitale said, Sacks reopened negotiations with Fox, which had been competing with Paramount for the film, and inked a deal with them. The Paramount Classics handshake was apparently replaced by a Fox Searchlight pen.

“There’s no moral high ground where money is involved,” said Mark Urman of independent distributor ThinkFilm. “The fact is the door was still open. If someone was continuing to talk, then the deal wasn’t done. There’s an etiquette and rules, but that’s only for British gentlemen. In Hollywood, there are no rules.”

It’s certainly not the first time buyers have feuded over acquiring an independently financed film in a festival setting. Miramax and Fine Line Features clashed over the sale of 1996’s “Shine” at the Sundance Film Festival, and a fierce bidding war broke out in a theater lobby over 1997’s “The Apostle” at the Toronto festival (October Films was the victor).

Paramount Classics, sister studio MTV Films and Fox Searchlight all wanted to buy “Napoleon Dynamite” at the 2004 Sundance Film Festival. Fox won the bidding, but the companies ended up joining forces for the film’s release.

In the “Smoking” case, it’s not clear which studio will prevail, but it is clear, at least to Vitale, that Sacks’ inexperience in the movie business is responsible for this dispute. Sacks would only say through a representative that he stands by the statement issued by Fox in which he echoes Reitman: “We’re incredibly proud that ‘Smoking’ is our debut film, and we’re thrilled to be partners with Fox Searchlight.”

Sacks is indeed a newcomer on the scene. He ran PayPal, the online payment service, and helped sell it to EBay for $1.5 billion. With this seed money he established a production company, Room 9, which went through all sorts of efforts to acquire the underlying rights to “Smoking,” based on a novel by Christopher Buckley. He then expedited the production itself. A creature of Silicon Valley, he’s used to getting things done. Whether he can accommodate the ways of Hollywood, or whether he even should, are open questions.

When asked if she and Sacks had spoken about the dispute, Vitale said they did and all Sacks could do was “stutter.” She said she got the same response from veteran William Morris sales agent Cassian Elwes, who was representing the film at the festival.

Sacks said in a statement: “I want to be clear that only one studio, Fox Searchlight, bought the movie. Although we had negotiations with Paramount Classics, no deal was ever concluded.”

Elwes, who could not be reached for comment, is reportedly trying to work out a deal between Fox and Paramount to settle the issue before it ends up in court.

Asked if legal action is possibility, Vitale didn’t rule it out, adding, “I hope not.”

Urman seems to think that Vitale doesn’t have a leg to stand on.

“Where are they going to go?” he asks. “The handshake court? About the only thing Ruth Vitale can do is stick pins in a Cassian Elwes doll. At the end of the day they’ll work something out.”

One irony about the dispute is that the film was written and directed by a Hollywood insider and that it skewers the self-serving and self-deluding ways Hollywood does business.

In the film, a Hollywood agent (played by Rob Lowe) cynically embraces the Eckhart character’s idea of selling cigarettes by having stars smoke them on screen. To him, it’s just another revenue stream. But the deal falls apart when Eckhart’s character is compromised by an unflattering newspaper profile. It turns out the deal was not a deal.

In other festival news, Sony Pictures Classics said it had reached a deal to distribute “The Three Burials of Melquiades Estrada,” which originally premiered at Cannes in May. It’s a tale of a cowpoke (Tommy Lee Jones, who also directed) determined to bury a Mexican comrade who was shot by a border-patrol guard (Barry Pepper).