Pic propels company to top of indie world

Alliance Films has emerged from the shakeup of the indie world as a nimble outfit whose transcontinental arms fueled a bigger move into production — a move that’s been borne out by subsid Momentum Pictures’ first production: “The King’s Speech,” which just nabbed 12 Oscar noms.

With tentacles that spread across three territories — Alliance Films in Canada (and Alliance Films in Quebec), Momentum Pictures in Blighty and Aurum in Spain — the company’s global net had already been cast; now it’s looking at a healthy balance sheet.

“We retired all of our external bank debt at the end of 2008,” says chief financial officer Alison Cornwell. “We have created a very simple structure, and the whole company is owned by SGF (Societe General de Financement) and Goldman Sachs.”

Adds London-based Xavier Marchand, prexy of worldwide distribution: “We spend about $120 million in production and acquisition across the three arms, but because we’re debt free, it makes us really solid. We’re a good source of financing for producers, so they can bank our contract.”

The company’s dominant subsidiary is the Canadian entity, which distributes approximately 60 pics per year plus another 10-15 Quebecois films.

It had thrived on output deals with New Line and Miramax, so when those ended, the outfit spent a lot of time trying to find replacement deals. Ryan Kavanaugh’s Relativity came to the rescue, and Alliance inked an exclusive output deal for Blighty and Canada, with the hopes that the ministudio can fill the gap on bigger, commercial Hollywood pics.

“We’re hoping Relativity will acquire at least five to six American movies a year,” Marchand says. “Then we can focus on the rest of the market and British films and arthouse films.

The price of all these movies is set in the output deal. “We don’t have to go into bidding wars,” Marchand says. “It’s very much like the old days of New Line in the way they (worked). Most of our partners consult with us on upcoming projects. We don’t have to go and acquire American films; we don’t have to play the competition game.”

Pics that Relativity has brought to Alliance include “Dear John” and “The Fighter.” It is skedded to deliver upcoming Bradley Cooper starrer “Limitless.”

“We have signed up almost all of the major content suppliers that were available to us in terms of output deals in Canada,” Cornwell says. “But we’re not just involved in single-picture acquisitions and output deals.”

Like many other distribution outfits, the company is moving away from just relying on acquisition and distribution and is also looking at creating content. For instance, it’s the only non-studio participating in the Spanish launch of iTunes. But as debt dissipated, bigger goals emerged.

“Traditionally, the business of the company has been distribution in every single platform,” Marchand says. “However, about 18 months ago, we decided to slowly, as cautiously as we can, move into generating films and producing.”

Alliance’s Brit arm, Momentum Pictures, has promoted and distributed British films including “Miss Potter,” “Another Year, and “Control.” Through that latter pic, the distrib forgeda close relationship with exec producer Iain Canning, who was looking for a first-look deal for his relatively new shingle See-Saw Films. Momentum liked what it saw, and obliged. The distrib’s foresight paid off when the first project Canning brought to the table in August 2009 was the $12 million “The King’s Speech.”

Momentum/Alliance had the option to bring some financing to the table against the U.K. rights, so paying way above the typical 10%-15% of the budget that U.K. buyers typically put down (“We believed in that film and wanted to make it happen,” Marchand says), the company helped develop the pic and found financing through the U.K. Film Council, Tim Smith and Paul Brett’s Prescience and — because of its longstanding relationship with the Weinstein Co., brought the project to the Weinsteins London team, which jumped aboard with the rest of the financing.

Pic has gone on to become Momentum’s biggest theatrical releases to date, grossing £18.3 million ($28.9 million) in its first three weekends in Blighty.

In December, the company struck a feature film co-production and acquisitions deal with Italian shingle Medusa Film, which is looking to create English-language content. (Alliance’s Canadian arm has always tapped into producing content.)

Alliance also forged a joint venture with Stuart Ford’s IM Global, launching a low-budget production shingle dubbed Automatik. That operation is spearheaded by Brian Kavanaugh-Jones, a former CAA agent. Automatik is looking for low-budget pics (under $5 million) that IM Global thinks will sell internationally. It will co-finance pics and sometimes wholly finance.

Automatik has a five-pic deal with “Paranormal Activity” producers Oren Peli, Jason Blum and Steven Schneider, as well as a slate that includes Barry Levinson’s “The Bay” and James Wan’s “Insidious.”

And while Momentum’s lineup over the past year has brought a raft of praise for the Brit arm, Marchand still laments the difficulty of the competitive Blighty market.

“The U.K. is a tough marketplace, very competitive, with a monopolistic pay TV station, low film rentals and many distributors,” says Marchand. “We are very fortunate to have our deal with Relativity, which also allows us to be very cautious on single-picture acquisition and spend more time on nurturing British films.”

So far, it’s struck up and maintained happy alliances on two continents, as long as it can keep up the momentum.

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