Aussies Want To Buy, But Short Of Cash

Don’t expect any change at AFM in the Aussie buyer contingent’s hardline stance on reduced and renegotiated prices. Although in an acquisitive mood they say that market realities mean increasing selectivity and economizing.

With the Aussie commercial tv industry still in disarray (of the country’s three webs, two remain in receivership and the other is shouldering hefty debt) buyers can no longer rely on a tv sale to help recoup advances and p& a costs on the films they buy.

That puts ever greater pressure on theatrical and video to cover costs; previously video was often the profit base for film acquisitions but that market also is slowing. “We’ll spend what it takes, but there are no open checkbooks any more,” notes John Rochester, head of Hoyts Entertainment.

Adds Tony Zeccola, head of major indie distrib Palace Entertainment: “It’s a matter of just tightening my belt a lot more and watching the pennies. It really is down to the nitty gritty business now.”

Reductions sought

The price inflation of previous years is now giving way to what distribs hope is a more realistic appraisal of the market by foreign suppliers. Price reductions of up to 50% and more are being asked and selectivity is the order of the day.

“We’re getting good at walking away,” says John Reid of agency Reid & Puskar. “You have to be very careful about what you buy now.”

Suppliers generally have been understanding, albeit initially restrained, buyers say, but some players still are not realigning to the changed Aussie market.

“Some sales companies are still asking for what I call phone number prices that were relevant to the market three to four years ago,” notes John Cerrone, g.m. of indie distrib Premium Films.

No soap tv

Relief from zilch tv sales isn’t on the immediate horizon. Each web has its output deals, and scant sales have been made in the indie theatrical arena.

“The door is still closed,” says Reid, who believes smaller indies may have a better chance with tv because of their smaller volumes and prices. “But when the door does open, the networks will be very choosy and prices will be low.”

Even when the webs do buy, top price for an A grade pic for tv is now generally put at $A200,000, way down on previous years when the industry was flush.

Two main buyers

For a buyer seeking all rights on an A grade title, Hoyts’ Rochester says now it “would be difficult to justify a price in excess of $A300,000-400,000.”

Two main buyers as usual will be Hoyts and Village Roadshow. For them AFM is a chance to meet with ongoing suppliers just as much as it’s a chance to buy, although Hoyts will use the meet to examine “the future of output deals and how best they serve Australia,” says Rochester.

Company will also continue to counter the negative image generated late last year when its debt levels triggered speculation about liquidity. Exhib/distrib has new long-term financing facilities with its banks, and, Rochester stresses, “has sufficient funds to do what we must do. It’s not a question of whether we can pay, but should we pay.”

At AFM Hoyts isn’t looking for direct to video product, only quality theatrical titles that can supplement its ongoing supplies. Rochester will be accompanied by Hugh McGowan, head of Hoyts Distribution, and interim L.A. rep Doree Glaser, who recently replaced longstanding rep Gordon Steele.

At Village Roadshow, prices scenario now means for indie pickups the company either acquires the looming triple A titles or straight to vid, per national marketing and distribution manager Alan Finney. “The concept of the average film has gone out the window; they won’t recover their p& a. We don’t want average films.”

With Finney will be Milt Barlow, head of Roadshow Home Video, buying for Oz and Korea (where it has a separate vid distribbery), L.A. rep Kathy Kass, and Greg Coote, head of L.A.-headquartered Village Roadshow Picture.

Et al. from Oz

Other Aussie buyers include:

Newvision Films: Australia’s major arthouse distrib, topper Frank Cox will be on the lookout for the best of the market’s art offering’s.

Boulevard Intl: A new Aussie buyer, it will be acquiring films on behalf of a newly formed joint venture between major film producer the Boulevard Group and indie exhib circuit the United Independent Exhibitors’ Group (Variety, Feb. 4). Newly installed Danny Mackay will rep.

CEL: Vid distribbery will seek only sell-through vid titles to feed its newly restructured operation, which saw the formation of a dedicated sell-through arm The Video Sell Through Co. Company needs volume and quality, but at realistic prices. Repping is chief exec Karl O’Farrell and g.m. Irene Taylor.

Palace Entertainment: Prexy Tony Zeccola says he’s approaching AFM with “great trepidation” due to the pressure on sensible pricing. Seeking a mix of mainstream and arthouse (his most recent theatrical offering was Jean-Claude Van Damme-headliner “Wrong Bet”), he notes that cost pressures have made the market a “lot more difficult.” Palace has had to defer for a while on taking delivery of some titles because of cost pressures, which he said suppliers understood.

Premium Films: Like Newvision and Palace, Premium is seeking product to sustain aligned exhibition and video interests (it has eight screens and a video arm) in addition to regular theatrical distribution. This is the distrib’s first AFM appearance as an independent; previously it was

Reid & Puskar: Company acts as a broker between suppliers and distribs. At AFM it’s looking mainly for video product, and expects to finalize a theatrical distribution arrangement with a major U.S. supplier, per John Reid. Partner Rod Puskar will be on hand.

As for fears about traveling during the Gulf crisis, most Aussies don’t give it a second thought. Says Zeccola, in a typical reaction: “It doesn’t bother me. I’ve got work to do, and if I don’t go it won’t get done.”

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