AFM: New ways to do old business

Prebuys, foreign rights emerge as top lessons at blah market

Everyone always likes to complain about the American Film Market, but who can put down an event where federal marshals were prowling the lobby of the Loews Santa Monica or someone was roaming the halls in a Michael Jackson mask. Wait — that’s not a mask!

Carping about the AFM is a tradition. This year distinguished itself, however, by its sheer lack of buzz.

David Linde of Good Machine Intl. screened a terrifying 35mm teaser for the Michael Bay-produced remake of “The Texas Chainsaw Massacre” for 200 buyers at Todd-AO — one of the few titles he reps that doesn’t already have a domestic distrib.

A screening of 22 minutes of the Walden Media-backed “Ghosts of the Abyss” from James Cameron elicited significant buyer interest (along with deals with Gaga in Japan and Telepool in Germany) but no domestic deal.

There was also plenty of hallway gossip about one of the few buzz titles at the market, Signpost Films’ “Bulletproof Monk,” even though some eyebrows were raised over its high pricetag. In any case, MGM snapped it up Stateside long ago.

Some of the reasons for this lackluster market, which ran Feb. 20-27, can be attributed to the downturn in the global economy, last year’s production slowdown and the aftermath of Sept. 11. However, even more significant are more subtle market forces, and the 2002 edition did much to reveal the issues facing the AFMgoers.

  • Prebuys are the standard. Prebuying films is a familiar tool in a distributor’s arsenal. Outside of festivals like Sundance and Toronto, however, the idea of waiting until a film is complete to put down a bid is becoming something of an anachronism.

    North American buyers already had much of the market in hand as they walked into the Loews for the first time.

    Among these were Summit Entertainment’s “Sahara” and Lakeshore Entertainment’s “The Human Stain,” both for Paramount Pictures; Pathe Intl.’s “In the Cut” for Screen Gems; TF1’s “Far From Heaven” for USA Films; Intermedia’s “Basic” for Sony; and GMI’s “Hero” for Miramax.

    Myriad and American Zoetrope announced three new productions — “On the Road,” “Kinsey” and “My Dark Places” — all of which are locked up by United Artists.

    Considerably fewer were unattached topflight titles. Among them were the just-announced “Borgia” for Myriad Pictures and helmer Neil Jordan, and Lakeshore’s “Underworld” — both still at the script stage.

    Similarly, French prod’n/sales company Wild Bunch wrote orders a-go-go for films still in the script stage such as “Demonlover” starring Connie Nielsen and Chloe Sevigny and Gaspar Noe’s “Irreversible,” starring Vincent Cassel and Monica Bellucci.

    “The international market has become more sophisticated,” says Patrick Aluise, exec VP and partner in consultancy the Steel Co. “It wants what we want in the U.S. — bigger, studio-caliber kinds of films. Very few indie companies have the financing capability to greenlight a film (of that size) without a prebuy in place.”

  • More is better. Whether prebuys or finished films, one-off territory deals are giving way to multiterritory, even worldwide acquisitions. Companies that don’t have the ability to act globally — and quickly — are left on the sidelines.

    This means more consolidation in an already contracting industry. Expect to see indies seeking ever-greater alliances that allow them negotiating power to match.

  • The international markets are not quite as lucrative as sellers might have hoped. The endless growth of the foreign marketplace has been the rallying cry of indies for years. Indeed, those prognostications were borne out by the ravenous appetite of the Japanese, followed by the equally hungry Germans. What was next? Italy? Spain?

    Despite previous saviorlike appearances, there is no foreign sales Santa Claus. Spanish buyers told sales agents at this year’s AFM that they were no longer comfortable paying 5% of a budget — 3% was more like it.

    Government efforts at stamping out piracy in Malaysia wiped out many Asian sales agents and buyers that may have attended AFM in the past, as did an overall stricter policy on issuing visas to the states after 9/11.

    As for Italy’s long-hoped-for bow of its own Neuer Markt (a Nuovo Mercato?), it seems likely to remain just that.

    “We’re selling, but there’s a downward pressure on pricing in most of Europe,” says Rick Sands, chairman of worldwide distribution for Miramax Films.

    “You just need to convince a distributor that your movie is worth taking a risk on. There is no closing in one meeting, and without a really strong theatrical release, you won’t sell a movie for TV.”

    The squeeze on international presales means that the foxhunt for coin will become even more intense as producers tap equity funds and seek deep-pocketed backers like Walden/Crusader’s Philip Anschutz, Catch 23’s Robert Sturm — and now, MDP’s Michael Jackson. Yes, that Michael Jackson.

(Andrea R. Vaucher and Scott Rosenberg contributed to this report.)

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