Hollywood’s big festival test

Sundance braces for economy bout

When Sundance Festival director Geoff Gilmore walked to the stage last week to receive the inaugural Sydney Pollack Award from the American Cinematheque, the audience of industry heavyweights gave him a rousing ovation.

Festival directors rarely get awards; they’re the ones handing them out. But that wasn’t the only interesting aspect of this honor.

The goodwill that greeted Gilmore may have been Hollywood’s way of saying, “We love you, love your work, but we’re not going to Park City this year.”

As layoffs, labor strife and the credit crunch bedevil showbiz, Sundance will be the first major festival since the economic meltdown, and it will prove a test case for the year’s other biggies.

Studios, talent agencies, law firms and media outlets are trimming travel budgets and expense accounts, scaling back the number of people they send to major festivals or, in some cases, bypassing the circuit altogether.

Sundance is forging ahead, despite the withdrawal of some longtime sponsors and expected cutbacks in festival attendance.

Other than the snow, every feature of the landscape is likely to be toned way down — corporate sponsorships, gifting suites, squadrons of agents patrolling Main Street, film acquisition battles and media frenzies. The local tourism trade lifted by the fest boom over the past decade is already suffering, with good rooms still available a mere month before showtime.

“We’re seeing a decline in lodging across the board,” says Stephanie Nitsch of the Park City Chamber of Commerce, who says the economic crisis has affected the entire winter season. One condo management company said rentals are down 40%.

Regulars say the shakeout could prove a long-needed tonic for what they call festival bloat, especially if the films themselves deliver.

Sundance reps insist it’s more popular than ever. “Ticket orders are up, donations are up, sponsorship is on par,” associate director Brooks Addicott says. “There’s even an increase in press accreditations, with the spike coming from international press.”

The 25th edition of Sundance, Jan. 15-25, is the first major fest since the global meltdown, which began in earnest just after the major troika of Venice, Telluride and Toronto.

“There’s no question that the economy is hitting film festivals,” says Jon Patricof, chief operating officer at Tribeca. “It’s going to hit us as well but since we have a window of time (before a late-April start) we’re looking at every option — screening venues, the number of screenings. Every element is being picked apart.”

The next few weeks will be telling as corporate ad budgets for 2009 get firmed up, the Sundance lineup is fully digested and travel and promo plans are set.

Some minds have been made up, however.

Publicist Jeff Hill, a 16-year Sundance vet who pushed undiscovered hits like “Napoleon Dynamite” at the fest, won’t be going this year. “The costs outweigh the returns,” says Hill. “I spend 40 to 50 grand to get a 5 grand profit. It’s just not worth it.”

While cost is his primary reason, Hill also said the lingering issues over Prop 8 played a factor, too.

That has made the festival an unwitting target. Anger in the film biz over the recently passed ban on gay marriage in California may well color this edition of Sundance.

Many in the gay and lesbian community blame the Mormon church for the measure’s passage. Sundance’s Utah location has made it a high-profile target, with some activists suggesting that the event should be boycotted. One of its venues is a Cinemark multiplex, and could be the source of protest given that its CEO, Alan Stock, gave to the Yes on 8 campaign.

Others come to the festival’s defense.

“We aren’t going to be organizing,” says Ellen Huang, founder of the Queer Lounge which holds receptions for the GLBT community during Sundance. Despite emails asking Huang to withdraw, she issued a statement in support of the festival and is putting together a panel to address the Prop 8 issue.

“Sundance’s record says it all,” says Huang. “ ‘The Life and Times of Harvey Milk’ won an award there. We deeply support the festival. We’re as angry as others about Prop 8. And there will be people at the fest who will be angry.”

Corporate sponsorships, the financial lifeblood of most festivals, have quickly become an urgent issue. Two of Sundance’s four top-level sponsors, Adobe and Volkswagen, have bailed due to overall ad biz cutbacks.

Motorola won’t be back, either.

The company, which has hosted a Motorola Lodge, to show off its handsets, and popular Late Night Lounge at the fest for the past 11 years, axed its entire entertainment marketing budget several weeks ago due to the down economy.

That means no money for festivals (Motorola also had a major presence at the Toronto Film Festival) or other sponsorship opportunities, eliminating one of the most active brands in town when it came to entertainment over the past 10 years.

VW, which had been a presenting sponsor at Sundance for the past six years, has been making moves to steer away from Hollywood, recently ending a long-term pact with Universal.

Similar pullouts are likely at other fests. Features of the brand-cluttered landscape once taken for granted are suddenly in question. Auto manufacturers have been key sponsors, but General Motors’ Buick division, for example, just cut ties with Tiger Woods. So how important a line item will film fests be as GM lurches toward bankruptcy or government bailout?

But Honda will now have the opportunity to give festival goers first-looks at its new redesigned cars and trucks.

Honda is one of the few automakers, outside of Hyundai, that is looking to elevate its image with consumers by using entertainment as a marketing tool.

Entertainment Weekly remains onboard despite Time Inc.’s massive layoffs, as does Hewlett-Packard. Microsoft is another key supporter and Cablevision’s Rainbow Media, which just bought the Sundance Channel, also joined the roster.

The sponsor tentacles that have insinuated themselves into thousands of tents, gifting suites and, a favorite perennial, “warming huts” up and down the Wasatch Mountains will not disappear overnight. But the spectacle of Hummer limos ferrying Verne Troyer and Paris Hilton to swag suites suddenly appears passe.

Patricof says the relationship between fests and sponsors will need to find a new equilibrium. “It’s always been a two-way street in terms of what we do for them and vice versa,” Patricof says, “but sponsors now are really going to need to see that their investment is having a specific result.”

Some vets predict lesser-known brands will step up to fill the cash void. It’s important to remember that there are official sponsors and there are ambush marketers that blanket the town with street teams and giveaways — it’s hard to say for sure that such gambits will vanish entirely.

Amid all of the sturm und drang about sponsors and tourists, the business of buying and selling films continues to be tough and will likely remain so at Sundance. Acquisitions have already been in recession mode. Since the last fest, Warner Independent, Picturehouse, Paramount Vantage and ThinkFilm have all folded or were drastically scaled back.

Even so, deals will get done even if the numbers will likely fall well shy of the $7 million plus shelled out by Vantage for “Son of Rambow” at Sundance in 2007.

“Companies still have business plans that call for them to acquire finished films,” notes Andrew Hurwitz, a vet sales rep at Gotham law firm Schreck Rose who’s handled pics like “The Visitor” and upcoming dramatic competition entry “Big Fan.” Sundance debuts “tend to be produced for less money than what the specialty divisions could produce themselves so if they see something they like, they’ll pay for it, even if it means spending a couple of million dollars.”

Distribs also use Sundance to launch pics. “We always enjoyed going there with three or four films for the press,” says Sony Classics’ Tom Bernard. Yet Sundance’s hunger for preems almost kept SPC from going at all, says Bernard. Many of their films, like the music doc “Soul Power,” were rejected because they played other fests. “If we didn’t have a film playing there we’d just monitor the fest from New York.”

While Bernard’s grumblings may spark fear in Sundancing filmmakers, keep in mind SPC picked up the micro-indie “Frozen River” last year just after Sundance. The film has outperformed theatrically, with $2.3 million domestic, and just collected a handful of Spirit noms last week, including best pic, director and lead, as well as two Gotham Independent Film Awards, including best feature.

While the organizers of Sundance take a lot of flack for the explosion of branding and tabloid star sightings, the official org has long decried the non-sanctioned parties, gifting suites and concerts that clog the town. A ritual of every recent fest has been the lamentation of founder Robert Redford about the blurring of the original cinematic mission.

For years the fest has touted its “Focus on Film” mantra, which is printed on buttons worn by every staffer and echoed frequently by Redford and Gilmore. It shouldn’t have to take an economic crisis to deflate the Park City circus, but one positive outcome may be that some films get to breathe the rare air of genuine acclaim.

At the very least, this year’s festival lineup will be a contrast to previous years — perhaps a lighter touch for tougher times. Gilmore told Variety last week, “There’s quite a bit of romance and melodrama in this year’s festival, a lot of genre, a lot of emotion. But I think it’s a type of escape that’s not necessarily escapist. Over the last couple of years, audiences got tired of films that directly engaged the Iraq War and other heavy subject matter. This year there’s an eclecticism and a breadth of storytelling that will see audiences perhaps open up to things they haven’t seen before.”

One producer, who’s gone every year for more than a decade, hopes that these changes will put the focus back on film. “I want to get the feeling of excitement back,” says. “It’s gotten to the point where you navigate this obstacle course,” citing awards season, the holidays, and then Sundance. “That’s not how I started out. You used to be able to think and talk about movies.”

Marc Graser contributed to this report.

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