Sitting in the executive wing of Lenfilm, a brand-new container building that sticks out like a beacon among the crumbling buildings on the lot, Lenfilm’s foreign relations exec Viktor Makhov told Variety that privatization is imminent.
“If the laws don’t change,” he said, adding that they frequently do, “we’ll be privatized in two months.”
Makhov also confirmed that a long-anticipated joint venture with Technicolor is in its final stages and will likely be announced at the American Film Market this month.
Lenfilm will become self-controlled as a result of privatization, predicts Makhov, with studio topper Nicholaus Ourzhoumtsev remaining at the helm.
Approximately 20% of studio shares will be earmarked for outside investors, including foreign partners. Tapped as candidates are Technicolor (independent of the joint venture) and “large foreign distributors.” Makhov told Variety that preliminary talks have been held with MGM, and that such contacts will be pursued at AFM.
As a prelude to privatization, Lenfilm is reducing staff from 2,500 to a target 1,500. With Russian hyperinflation, salaries have doubled in the past 18 months and state subsidies have dried up.
Soon to celebrate its 75th anniversary as a studio, Lenfilm’s biggest asset may be the ground it’s sitting on. The main facility occupies several square blocks of prime real estate, although there are no plans to sell.
Lenfilm is aggressively pursuing foreign productions. Producing with hard currency is not only attractive, but quickly becoming a necessity. Ruble-based productions can’t be realistically budgeted in the current economic climate. “If a budget comes in at 10 million rubles,” said Makhov, “we automatically allow for 30 million.”
Private production companies forming around town are competing with the studio for dollars. Competition is also coming from within. One studio insider said employees “borrow” camera equipment and rent themselves out to foreign producers.
Now situated in newly rechristened St. Petersburg, Lenfilm will retain its name. “‘Petfilm’ would sound like we are geared toward small animals,” Makhov said.