Optimism sweeps over AFM
After exiting film financing in 2008, Grosvenor Park is back in business — just one of many signs of cautious optimism as indies begin the American Film Market.
Money has loosened up, there are new players and deals are more focused — just a few reasons for cautious optimism as AFM bows this week.
None are more optimistic than Don Starr.
Three years ago, Starr got out of the film financing business after spending more than 25 years structuring deals for more than 400 films through his shingle Grosvenor Park.
“When we closed up financing, the ancillaries had collapsed,” Starr recalls. “We had lost our ability to go out and collect from the distributors.”
Now, Grosvenor Park is back in the film financing business. The company announced during the Toronto Film Festival that it expects to deploy a minimum of $100 million over the next year, targeting films with budgets ranging from $10 million-$30 million.
Starr says the most recent Berlin and Cannes markets were more stable as financing began to loosen up.
“There had been only senior debt available if you had 75% of the foreign rights sold, so there’s little upside for producers after that,” he adds. “We’ll fund against senior, tax incentives and gap. Now you can sell 25% to 40% and we’ll advance the rest. And if we already have the key relationships, it’s much less complicated.”
There’s a guarded bullishness emanting from marketgoers as the 32nd edition of AFM starts on Wednesday for a variety of reasons:
- There’s been a real savings in talent costs, which have been recalibrated in the post-2008 era.
- Quality is trumping quantity, as indie hits such as “Limitless,” “Black Swan” and “Insidious” have proven. “It’s been very helpful that there have been successes for us,” notes Glen Basner of FilmNation, which handled sales on “The King’s Speech.”
- There are more big buyers like Open Road, CBS and FilmDistrict as the Hollywood majors ratchet back on midbudget projects. “It’s still not easy to put together films, but ‘Black Swan,’ ‘The King’s Speech’ and ‘The Fighter’ are all films that give us confidence,” notes Paul Green of Anonymous Content. “The marketplace is ideal for a company like ours now that the majors have ceded some of this ground.”
- Foreign markets have been robust and growing, notes Exclusive Media’s Alex Walton. “For the first time you can professionally predict how Russia, China and Brazil are going to perform, which is a huge positive for financing,” he adds.
- There are new players on the scene, such as ATO, Cohen Media Group and Indomina.
“I’m optimistic about AFM,” says Parlay Films’ Lisa Wilson. “Toronto was strong but it’s still not a market — it’s a festival. So people are looking for projects, and they need material for the second half of 2012 and beyond.”
Preferred Content’s Kevin Iwashina concurs, and adds, “Toronto did a good job of prepping the industry for AFM. I think people are in the deal mode. UTA, CAA, WME will use AFM as a way to generate the next round of projects that will premiere at Toronto.”
Toronto also saw relatively new distribs such as WWE, Cohen Media Group and ATO came away with titles.
ATO’s head of acquisitions, Sarah Lash, says she’ll be spending about 10% of her time in AFM screenings and the rest in meetings — an inversion of the Toronto ratio — with an eye toward completed films and pre-buys.
“We pre-bought ‘Woman of the Fifth’ because it had Ethan Hawke and Kristin Scott Thomas, so it felt like a sensible calculated risk.”
Arianna Bocco, senior VP of acquisitions and productions for Sundance Selects and IFC Films, says she’s upbeat after closing four deals at Toronto.
“AFM is really useful because it’s our last chance to prioritize how we’re going to handle next year,” she notes. “So I’ll be going from meeting to meeting to meeting. I have to remain optimistic that we can find something like ‘The Trip’ again.”
Jennifer Dana of Gersh believes that AFM sales will probably start slowly simply because buyers have been relatively active this year. “Because of Toronto, everyone’s shopping bags are pretty full right now,” she notes.
Still, plenty of buyers have come into town early for pre-market meetings to start getting scripts and having a larger say in casting.
“It’s not about the bigger stars,” Dana adds. “It’s about the right package, such as getting Malin Akerman on ‘A Little Something for Your Birthday.’ It’s the right film for her.”
Summit Intl. struck gold four years ago at AFM when it began selling the foreign rights to the first “Twilight” film.
David Garrett, president of Summit Intl., says it’s helped many portions of the foreign business — a landmark franchise made outside the six major studios with more than $1.7 billion in worldwide grosses.
“Thankfully, we still have two ‘Twilight’ films to go,” Garrett notes. “These films have strengthened our relationship with our co-distributors. It shows that the relationships can be profitable over the long term.”
Summit is coming to the market to sell Steve McQueen’s “Twelve Years a Slave” with Brad Pitt and Michael Fassbender attached, and Louis Letterier’s magician heist project “Now You See Me.” And, with the business becoming more reliant on franchises, it’s looking for more indie tentpoles — the “Red” sequel and a rebooted “Highlander” with Juan Carlos Frensadillo attached to direct.
CineTel chief Paul Hertzberg, newly tapped as chairman of the Independent Film & Television Alliance, shares the optimism. “I just got back from our best Mipcom in 10 years. When you’re in this business, you’re always traveling — Hong Kong, Cannes, Berlin — so you’re always updated on how the business is doing.”
Hertzberg believes that the financial crisis in funding forced producers and financiers to become more focused in recent years.
“More and more buyers are taking a rifle approach rather than a shotgun approach,” he notes. “They find their niche and hone in on it. For example, Avi Lerner does high-end action films through Nu Image/Millenium.”
Hertzberg points to “The Expendables” — which grossed nearly $300 million worldwide — as an indication that the indie biz is thriving.
“That performance gives AFM and indies credibility,” he notes. “You see people pull together films like ‘Texas Killing Fields’ and ‘Insidious’ and it shows that you can find a way. Financing is better now — and don’t take ‘no’ for answer.”
Lionsgate Intl. is coming to AFM with at least eight titles, including remakes of “Evil Dead” and “Old Boy.” “We are competing with the majors on event-level films,” says president Helen Lee Kim. “That’s the big question on everyone’s mind — can we compete on a Friday night?”
And as one sign of the indie sector’s optimism, Lee Kim notes: “We are showing eight or nine movies at AFM that were started 18 months ago, when times were really rough. It felt really constricted, but these films still got going.”