CANNES — The real high rollers here at the Cannes Film Festival didn’t waste their time at the roulette tables of the Royal Casino. They were placing their big bets from hotel rooms, laying the financial groundwork for large-scale international productions which the Hollywood studios are too cash-strapped to fully finance.
Dino De Laurentiis last week was in a suite at the Carlton Hotel, touting a reel of promotional footage that Baz Luhrmann has assembled for “Alexander the Great,” starring Leonardo DiCaprio. Anticipating a late 2003 production start, De Laurentiis was selling the DreamWorks/Universal epic to foreign distribs.
Nephew Aurelio De Laurentiis was a few blocks away at the Martinez Hotel. A bottle of Tattinger champagne chilled in his suite, where he screened rushes of “World of Tomorrow” that were Fed-Exed from producer Jon Avnet’s office in Malibu, Ca.
Aurelio De Laurentiis has put up his own euros to finance the retro sci-fi pic, starring Gwyneth Paltrow and Jude Law. Budgeted at $70 million, it doesn’t yet have a U.S. distrib.
Aside from these two risk-takers, high-stakes gamblers such as Initial Entertainment Group topper Graham King, Intermedia CEO Moritz Borman, Miramax co-head Harvey Weinstein and Colorado billionaire Philip Anschutz are spearheading a radical shift in the world of film financing.
They are filling a void in the international film market, raising hundreds of millions for tentpole movies developed, financed, and in some cases produced, outside the Hollywood studio system.
There have always been showmen willing to go out on a limb with films. The big difference now is the scale.
In the past, some mavericks have worked on $20 million pics. Now, their budgets are on a scale that sometimes reaches three to five times that amount.
While everyone admires a person who’s willing to risk it all, the question is: Are these folks brave, smart, self-destructive — or some combination thereof?
Theirs are movies the studios can no longer afford to support on their own. The financing is coming instead from a mix of studio funding, foreign pre-sales, equity deals and international tax incentives.
The upside for these producers is potentially great: They enjoy more creative control, dictate the sales terms with distribs and reap a greater percentage of their movie’s profits.
But the risk is equally high.
“You sharpen your pencil three times before you greenlight these movies,” says Borman.
Intermedia is producing its own “Alexander the Great” epic, directed by Oliver Stone. Warners will distribute the pic, but Borman is raising additional capital from foreign pre-sales and Euro tax funds.
Ensconced in a turn-of-the-century high-rise opposite the Cannes Palais, Borman spent several days during the fest separately squiring Stone and Arnold Schwarzenegger around Cannes, promoting “Alexander” and another Intermedia event pic, “Terminator 3: Rise of the Machines.” Latter was produced with indie mavericks Andy Vajna and Mario Kassar.
The logline of Intermedia’s “Alexander” reads like a mantra for these producers: “Fortune favors the bold.”
Other Cannes high-rollers include:
- IEG CEO Graham King, the producer of Martin Scorsese’s biopic of Howard Hughes, “The Aviator,” also to star DiCaprio.
WB and Miramax are splitting domestic rights on “Aviator,” with Miramax consulting on production, but their investment is capped, with overages covered by IEG. Pic, which will start shooting in Montreal in July, has sold in Japan.
- Cary Granat, who as head of Walden Media, is overseeing “Around the World in 80 Days,” a $110 million Jackie Chan remake of the 1956 Oscar-winning Mike Todd-produced pic. Granat brought Chan to Cannes for a day to promote the film, which has presales in more than 30 territories, but has lacked U.S. distribution since January when Paramount pulled out.
Walden’s corporate parent is Philip Anschutz, whose other shingle, Crusader Films, is producing the “Indiana Jones”-style action-adventure, “Sahara,” at Paramount.
Anschutz, who owns exhibition giant Regal Entertainment, is gambling tens of millions on these shingles in an effort to create movies for families and schoolkids.
- Miramax co-topper Harvey Weinstein, who was stuck carrying the financial burden of “Cold Mountain” after MGM withdrew last year as co-financier. Weinstein said in Cannes that he’s looking into equity financing to help cover the $80 million budget of the pic, which is set for release at the end of the year.
“Bet on me, fellas,” Weinstein said. “I’ve seen it.”
Though Miramax has a corporate parent in Disney, big-budget pics like “Cold Mountain” and “The Aviator” aren’t typical studio popcorn movies.
“Studios are designed to create product that will show return on investment for multinational corporate conglomerates,” says ICM’s Ken Kamins. “That’s created a vacuum that’s being filled by producers driven by passion.”
Kamins likens these producers to old Hollywood titans like Cecil B. DeMille and David O. Selznick. “They’re dreamers,” he says. “They don’t wake up trying to figure out how to serve the studio master.”
Without corporate parents like AOL or Sony, Borman adds, “you can’t turn to Daddy and say, ‘I fucked up. Please give me more money.’ ”
Like the great Hollywood titans, these producers have a streak of Barnum-esque showmanship, and they stand out sharply from their buttoned-down studio brethren.
Unlike Hollywood producers a generation ago, their ambitions are global; some worked as sales agents, haggling distribution deals in far-flung territories, before becoming producers.
Packing promo materials in suitcases and shipping them to Cannes on private jets, they’re sanguine in the expectation that the festival’s heady atmosphere will amplify the buzz and global demand for their flashy titles.
Despite a rocky foreign sales market, these movies have a built-in allure for international buyers, says Miramax chief operating officer Rick Sands.
“A tentpole can drive the slate for television in foreign markets and for the networks,” Sands says.
With studios controlling the world on the big franchises, there’s a need for splashy product among buyers like Roadshow in Australia, Gaga and Nippon in Japan, Bac and Metropolitan in France.
Dino De Laurentiis says he is close to pacts to sell “Alexander” in Japan, Germany, France, Italy, Spain and the U.K.
The greatest indie gamble in recent years was New Line’s decision to shoot “Lord of the Rings” as a trilogy in one fell swoop in New Zealand.
Sold to foreign buyers outside New Line’s usual output deals, the success of the pic further whetted the appetite among foreign distribs for larger-than-life event films from Hollywood.
Though foreign distribs are hungry for big product, many of them don’t have the cash. That’s leading the larger studio and indie producers to seek alternate financing sources, like soft money, for their tentpoles.
Wolfgang Petersen’s “Troy,” which is shooting in London (among other locales) for Warners, is receiving U.K. tax money; so is Miramax’s “Cold Mountain,” now in post-production in London.
Foreign buyers are also wary of pics without U.S. distribution, which means that producers of big foreign co-productions are still reliant on the de facto greenlight of a studio partner.
But faced with budget cutbacks of 25% or more, Hollywood studios are carefully picking their longshots. They’re partnering on more productions and strategically selling off territories on big movies.
“We’re not looking to risk $100 million, plus P&A,” Sands says. “We’re making bigger movies without increasing the risk we’ve historically taken.”
Many of these high-rollers are allergic to the controlling bureaucracy of corporate Hollywood.
“I finance these films myself, because I don’t want to be conditioned by Hollywood,” Aurelio De Laurentiis says.
But their financial ambitions are as broad as those of any studio production chief.
“We are making a very commercial science-fiction picture,” he says of “Tomorrow.”
“We are not making Proust.”