Buyers raise acquisition ante

Finished pix look lucrative despite million dollar pricetag

“Hustle & Flow” may be a distant memory at the box office. But the $9-million deal Paramount struck with the filmmakers at last year’s Sundance Film Festival is still rumbling through the crisp mountain air.

In the wake of the “Hustle” deal, every major fest has yielded an acquisition in the neighborhood of $10 million. Universal bought Brian De Palma’s in-production “The Black Dahlia” at Cannes last year for $10 million; Fox Searchlight bought “Thank You for Smoking” at Toronto for $8 million.

And this year, Searchlight swooped into Sundance, out-maneuvered its competitors and bought “Little Miss Sunshine” for $10 million in addition to 10% of the gross — an unprecedented pact.

These are hefty prices by any measure, made more striking by the fact that so many projects hyped in the heady atmosphere of a festival fall flat at the box office. In the ’90s, “The Spitfire Grill” and “Happy, Texas,” both acquired at Sundance for $10 million each, raised the acquisitions bar.

But when “Happy, Texas” grossed a modest $2 million in 1999, buyers seemed to get wise, at least for a while. For a few years, fest acquisitions rarely topped $3 million. That was until when Miramax shocked specialty buyers by spending $5 million for “Tadpole” in 2002.

This year, Sundance is likely to produce at least three deals worth $5 million or more, including “Sunshine,” and Michel Gondry’s “The Science of Sleep,” which Warner Independent Pictures picked up for $6 million in a deal that gives the specialty arm only U.S., Canadian and U.K. distrib rights. It was Warner Independent’s most expensive fest buy to date.

Both buyers and sellers are quick to play down the dangers of these gambles. “You are reducing risk when you have a finished movie,” said Paradigm Consulting’s Peter Broderick. “(When you make a film) the casting might not work out, or the directors aren’t what you had expected. When it’s close to done, you don’t have to look into your crystal ball.”

It was only a few years back that specialty units, including Focus and Searchlight, started to turn away from festival acquisitions to focus on making their own movies inhouse.

But distributors have found recent success in releases like “Napoleon Dynamite,” “March of the Penguins” and “Open Water,” erasing the memories of earlier Sundance disappointments. The latter film became Lionsgate’s largest release of all time when it played on some 2,700 screens in 2004.

That has had a big impact on the festival. Studios are jumping into the fray, looking for wide releases to fill out their slates. Last year it was Paramount. This year Universal — as opposed to Focus Features — became a Sundance player, throwing its name in the ring for Edward Norton starrer “The Illusionist.” Pic is being described as sufficiently commercial to justify a wide release, with specialty arms reluctant to pay the $20 million or more in P&A costs it might engender.

For producers, a $10 million payday can be pure serendipity. One of the factors behind the $10 million pricetag for “Little Miss Sunshine” was the sudden bankability of star Steve Carell, a comedy actor who, it’s assumed, can drive DVD sales. Fox homevid execs were ecstatic at the title’s potential. Greenlighting a Carell vehicle right now would cost Fox a lot more than $10 million.

The irony is that many of these projects were shopped to studios before they secured independent financing and wound up on the market at Sundance.

“Hustle & Flow,” “Little Miss Sunshine” and “The Darwin Awards” all were in development at Universal or Focus Features at one time or another.

“The (studio subsids) look at so many scripts and then say that they are ‘execution-dependent,'” says FilmFour exec Peter Carlton, whose banner financed last year’s indie breakout “Me and You and Everyone We Know.” “They are interested in the script, but then they say, ‘No, we need to see it,’ and they track, track, track. It’s not going to end up costing them that much more (buying after the film is done).”

Searchlight topper Peter Rice also said “Little Miss Sunshine” was “execution-dependent” after buying the pic. It wasn’t until directing duo Jonathan Dayton and Valerie Faris, both vets of the musicvid and commercials world, proved they could crank out a commercially appealing feature that studios were willing to bite.

It’s one of the byproducts of the risk-averse climate in Hollywood: Quirky low-budget projects look far more attractive in the high-altitude climate of Sundance than they do sitting on the shelf back home.

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