Par, Searchlight 'Smoking' pact stirs fest

TORONTO — The old debate has been ignited yet again: When is a deal a deal?

Paramount Classics claims it had a handshake agreement to acquire world rights to “Thank You for Smoking.” A William Morris agent nonetheless found some further action; he caught Fox Searchlight’s interest and promptly closed a deal with that company.

Paramount is yelling “foul.” Fox Searchlight says “we topped your offer.” The agents involved are delighted; they got the commission to ease the aggravation.

At the center of the controversy is a movie directed by neophyte helmer Jason Reitman, son of Ivan. He got really lucky: Searchlight was said to have forked over up to $9 million for “Smoking’s” world rights ($7 million for domestic, $2 million more for international excluding Italy, France, Benelux, Switzerland and Scandinavia).

Rumors swirled Monday that Par was exploring legal action, claiming it had a handshake agreement with “Smoking” producer David Sacks and his reps at William Morris, which the studio said is par for the course in festival negotiating. According to Par execs, their agreement should have kept Sacks and WMA from accepting any further offers.

But Fox Searchlight and Sacks say Par left the door open for further talks and the pic belongs to the Fox subsid, which bested Par’s $6.5 million offer with an eleventh-hour bid and has the paperwork in hand to prove it.

People close to the deal say Par did have a verbal agreement in place but that with no contract signed, the film’s producer had the right to entertain other offers.

WMA was said to be considering a way to bring Par and Searchlight — which had previously teamed to distribute “Napoleon Dynamite” — together on “Smoking.” But no progress on that front was unveiled Monday.

Most execs, speaking on condition of anonymity, strongly cautioned that only Par, Searchlight and WMA know what happened in the “Smoking” scenario, which played out into the wee hours Saturday.

Is a handshake enough?

But two distinct points of view were emerging as to when a deal is considered done in the eye of a frantic film festival.

The topper at one mini-major said his company strikes handshake deals frequently and worries that if such pacts cannot be honored, indie dealmaking will be bogged down.

“If the handshake deals we make at festivals (are compromised),” he said, “the whole thing falls apart.”

But an acquisitions exec at a competing mini-major said to leave the bargaining table without a signature is an invitation for last-minute heartbreak.

“You have to lock them in a room and get them to sign,” she said flatly. “Paramount claimed they had a deal, but they didn’t. I would always do a short form (contract).”

Said yet another studio subsid topper: “If it happens where someone is told that a movie is theirs, and someone else comes in with an offer for more money and gets it, then that concerns me. But it does happen. A lot of times, when a picture is sold, a short while later another party has remorse and feels they should’ve bought it.”

Many execs point to a scenario in Sundance in which Scott Hicks’ 1996 Oscar hopeful “Shine” was up for grabs and a number of companies believed they had bought the film. With the film’s producers — who were inexperienced selling a pic — fielding offers, Fine Line and Sony Classics were among a few banners that thought they had bought the film. Ultimately it was Fine Line that came away with a contract and U.S. rights.

Time to move on?

One distribution vet said he would be reluctant to take legal action if he were Par in the “Smoking” dust-up.

“I would not want to be associated with a film if a filmmaker wanted to be working with someone else,” he said. “I would just move on.”

“Smoking” producer Sacks — who launched his Room 9 production shingle in 2003 after serving as chief operating officer of online payment service PayPal — said in a statement issued Monday: “The fact that multiple studios bid intensely for this movie is a testament to what Jason has achieved. However, I want to be clear that only one studio, Fox Searchlight, bought the movie. Although we had negotiations with Paramount Classics, no deal was ever concluded.

“Although this is my first movie,” Sacks went on to add, “I was represented by highly experienced industry professionals. I am also a lawyer and have run a large public company. We know when we have closed a deal, and when we haven’t.”

Many of the top execs working in the specialty film world are veteran players who make deals with each other regularly and have played musical chairs in each other’s jobs at the studio subsids. But one mini-major’s topper reminded that though the indie world can have a close-knit feel it’s still Hollywood.

“If you trust someone, you should be able to do handshake deals,” he said. “But we don’t operate that way, and we would never let someone out of the room without (a written agreement).”

Rival pix fail to ignite

Fueling the fire, “Smoking” remained one of the few pics to satisfy buyers’ hunger so far in Toronto. Many anticipated pics — including David Ayers’ “Harsh Times,” Terry Gilliam’s “Tideland” and Joshua Michael Stern’s “Neverwas” — had buyers circling but failed to create the fervor that “Smoking” ignited over the weekend.

Other pics with deals said to be in the works included South African Oscar entry “Tsotsi,” Cate Blanchett starrer “Little Fish,” the docus “The Heart of the Game” and “Sketches of Frank Gehry” and Andrucha Waddington’s “House of Sand.”

Other deals reached so far include Sony Classics’ pickup of Tommy Lee Jones’ “The Three Burials of Melquiades Estrada” and First Look Films’ acquisition of “The Proposition,” which was penned by rocker Nick Cave and directed by John Hillcoat.

On grizzled deal veteran commented: “This reinforces my old theory: Never leave the room without a signature.”

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