Venture will produce fewer pics with bigger budgets

Incentive Filmed Entertainment, launched at last year’s Cannes Film Festival by Screen Capital Intl. and WMA with $100 million in funding, has radically changed its game plan 18 months into its five-year program.

Incentive chairman David Molner has named ex-Paramount Vantage president Nick Meyer as point man in packaging pictures and making all the distribution deals for Incentive through his Sierra Pictures banner.

Original plan was to make 10 pics per year with budgets up to $15 million by leaning on a single agency and many sales agents; under the new strategy, WME retains a small equity stake but is now on an equal footing with other percenteries bringing film packages to Incentive. Incentive will now make two to four films at budgets up to $30 million.

The moves are a response to an indie film and pre-sales marketplace that bears little resemblance to the one that existed when Incentive launched 1½ years ago. Molner felt it would be better to navigate the rough waters with a seasoned exec who could speak as easily to talent agents as he could to foreign distributors.

The changes come after Incentive completed its third film, “Area 51,” and locked a Paramount domestic distribution deal for the extraterrestrial thriller by “Paranormal Activity” writer-director Oren Peli.

In addition to Incentive making Meyer its exclusive sourcing and sales agent, Screen Capital-backed hedge fund Aramid Entertainment has made an equity investment in Sierra Pictures.

Meyer formed that venture with Marc Schaberg five months ago to sell Sidney Kimmel’s slate and pictures like the Darren Bousman-directed “Mother’s Day” remake and the Mickey Rourke-Megan Fox starrer “Passion Play.”

Sierra will continue building that side of his business and will be at Sundance selling “Hesher” and “Sympathy for Delicious.”

Molner, who is Screen Capital Intl.’s managing director, makes the final greenlighting decisions for Incentive along with board member and producer Robert Simonds. Incentive still has its $100 million backing, which includes senior financing through a JP Morgan Chase-led consortium.

“We put the capital structure in place for Incentive just as the credit window was closing,” Molner told Daily Variety. “Since then, the world of foreign sales and domestic pickups has changed drastically. We felt that aligning with Nick and investing in his new company is the best bet to navigate the new challenges.”

Everything has changed since Molner announced Incentive with WMA chief Jim Wiatt, with WMA’s Cassian Elwes and Rena Ronson aboard to rep the pictures. Neither Wiatt, nor Elwes or Ronson survived WMA’s merger with Endeavor, and the indie market is a shadow of its former self because of an attrition of distributors and a glut of pictures financed with hedge fund coin.

“When we launched Incentive, we wanted to work with all the agencies but valued having a close relationship with one because it served as a great way to source projects,” Molner said. “Today, we are agnostic as to where the projects originate, so long as they meet our commercial parameters and pass muster with Nick’s good judgment. He’s now the fulcrum and will bring his real-world knowledge of both foreign markets and the needs of domestic distributors to the process of selecting pictures.”

Meyer said the arrangement gives his young company a leg up on other established sales agent operations.

“It helps distinguish us in the marketplace because not only can we use the force of our foreign sales capacity to get pictures made, our partnership with Incentive gives us the ability to greenlight pictures,” Meyer said.

Incentive has so far financed three pictures. Aside from “Area 51,” it financed “Blue Valentine,” the Ryan Gosling-Michelle Williams starrer that debuts in competition at Sundance from “Half Nelson” producers Lynette Howell, Jamie Patricof and Alex Orlovsky.

It also financed the Don Roos-directed Natalie Portman starrer “Love and Other Impossible Pursuits.” That film bowed at Toronto but did not get a distribution deal. Molner said the film is being re-edited, and potential distributors will see the result early next year.

Incentive’s original goal to generate volume in a bull market has been replaced by a desire to exploit opportunity in a down market.

“The closing of New Line, Miramax and other great specialty divisions is an understandable big-studio response to the current risk in the business,” Molner said. “But for other market participants, there’s a major opportunity. Product that might have naturally flowed to studios will now migrate outside the system. We are counting on Nick’s relationships with filmmakers and other talent to capitalize on those opportunities and drive creative deals to the platform. “

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