It’s definitely a buyer’s market
It’s Hollywood’s version of the saddest orphanage imaginable: More than a hundred precious newborns looking for a loving home. Only a dozen and a half will be lucky enough to find one, with fewer adoptive parents now showing up.
The Sundance Film Festival, which starts tonight, represents many things to many people -- a bold collection of arty movies for cineastes, a free-flowing booze binge for party animals -- but at its core Sundance stands apart as the nation’s most important market for films made outside the studio system.
Like everything else in the upside-down economy these days, though, the festival’s sales dynamics are certain to be transformed this year, especially for the historic Sundance stronghold of documentary films.
“It’s a scary time out there,” says Jim Stern, a producer of “An Education,” a coming-of-age drama considered one of the top films headed to Park City in search of a theatrical distributor. “I am concerned. But I also think there are going to be opportunities.”
Several factors have scrambled pages in the 2009 Sundance script, making this year’s 25th annual festival potentially more difficult for movies seeking a buyer.
First, several significant specialized film distributors either have closed their doors or are scaling back severely, including Warner Independent Pictures, Picturehouse, Paramount Vantage and the Weinstein Co. Second, some of the past Sundance buying stalwarts -- including Fox Searchlight, Focus Features and Lionsgate Films -- are producing more of their own movies, and buying fewer completed films from independent producers. Third, almost of all of last year’s bigger Sundance sales, including “Hamlet 2,” “American Teen” and “Choke,” were box-office busts.
“Those [box-office] numbers didn’t support the buying prices. So it will be a buyer’s market,” says Michael Schaefer, vice president of acquisitions for Summit Entertainment.
“I think the big movies won’t get the big dollars this year,” says Bob Berney, the former head of Picturehouse who is putting together a new distribution company for art-house films. “You can be very tough on your terms and on your deal points, which is the pendulum of the market right now.”
Mark Urman, the distribution president for the newly formed Senator Entertainment, which will be shopping for potential pickups, similarly expects the scales to tip in the distributors’ favor. “There are far fewer studio-owned specialty divisions,” he says, “and that will have a beneficial effect for all concerned.”
There’s another complicating factor in this year’s festival, which concludes Jan. 25 and will include the premieres of 118 feature-length dramas and documentaries. A number of the new, independently financed dramas were made under a provisional agreement with the Screen Actors Guild, whose previous pact with the studios expired half a year ago.
The specialized film units owned by the studios -- which include News Corp.'s Fox Searchlight and Disney’s Miramax Films -- are concerned that if they buy a movie made under SAG’s provisional deal with non-studio producers, the studios might be forced by SAG to adopt an interim agreement, which their parent companies did not negotiate.
Among the films apparently made under the provisional deal are the police drama “Brooklyn’s Finest,” Ashton Kutcher’s gigolo story “Spread,” and the Susan Sarandon-Pierce Brosnan grief drama “The Greatest,” all considered top acquisition targets.
Although the rapidly evolving marketplace suggests the odds of a Sundance bidding war this year are slim, there also could be simultaneous downward pressure on the sales prices -- known in the industry as minimum guarantees -- for Sundance’s smaller films, especially nonfiction films. Even the widely praised Sundance documentary “Man on Wire,” for example, has grossed less than $3 million in its theatrical release, barely enough to cover many documentary films’ typical acquisition and distribution costs.
“All movies have risk, but one of the ways to keep your risk down is to hold down the minimum guarantees,” says Danny Rosette, the chief operating officer of Overture Films, which struck gold with its 2007 $1-million Toronto International Film Festival purchase “The Visitor” but found only rocks with its 2008 $4.5-million Sundance pickup “Henry Poole Is Here.”
“There is still a lot of roadkill out there,” Rosette says, “but you look at how Fox Searchlight has done with ‘Slumdog Millionaire,’ you know there’s still a lot of business to be done.”
Hollywood’s sales agents are hoping that buyers remember that message when they begin peddling their slates in Park City, Utah.
Rich Klubeck, alongside United Talent Agency colleagues David Flynn and Bec Smith, is representing the Sundance movies “The Messenger,” “Five Minutes of Heaven” and “Paper Heart” -- all for sale. He says the appetite for ambitious art films is healthier than many assume. “There are a lot of positives in the market,” Klubeck says, “I don’t think we’re in a period where people don’t want to see serious drama.”
William Morris agent Cassian Elwes, who with fellow agent Rena Ronson is peddling six Sundance titles, realizes buyers may be hesitant to fork over significant minimum guarantees, and is working with filmmakers to manage their expectations.
“You have to be asleep not to know there’s been an economic shift in the world,” Elwes says. “One of the main challenges now is to decide if you want to go to television or to theatrical.”
That a number of Sundance movies may debut on cable television and not in theaters is OK with Jonathan Sehring, the president of IFC Entertainment, which releases some of its movies simultaneously in theaters and through video-on-demand.
“For us, it’s a great model in this day and age,” says Sehring, who believes his hybrid strategy can bring Sundance movies (his festival pickups include “This Film Is Not Yet Rated” and “The Confederate States of America”) to a broader audience at a much lower cost than a pure theatrical release, which can cost $6 million for even a small movie.
“I don’t know how some of these companies stay in business.”