W2 forms valuable service

Peace Arch vet Flock acts as backup distrib

After six years as CEO of distribution and sales outfit Peace Arch Entertainment Group, John Flock was ready for a change.

“Nobody had any money in 2008 and 2009, and a glut of product had clogged the system, but it appeared in the second half of 2010 that the clouds were lifting,” he says. “We thought it was a good time to get into the market.”

Enlisting longtime financier colleagues Warren Nimchuck and Warren Fergus as partners, and taking along Peace Arch execs Paul Gardner and Julie Sultan to head North American distribution and international sales, respectively, Flock launched W2 Media (with himself as president and CEO) in January.

“There are a slew of movies very few people are picking up. They aren’t as marketable as the major indie titles, but still have some life in ’em,” Flock says. “There aren’t a lot of guys doing what we’re doing, either domestically or internationally.” Most W2 projects fall in the $2 million to $8 million budget range.

In addition to its main distribution and sales duties, the shingle’s W2 Entertainment Finance affiliate funds projects it doesn’t necessarily release, focusing on interim tax credit financing, gap financing, P&A funding and arranging cash flow against domestic and international pre-sale contracts with decisions informed by its other areas of expertise.

Being a sales, financing and distribution company can also provide some insurance in an uncertain market. “If (a film we help finance) doesn’t work domestically, we may be willing to buy it from you to protect our own investment,” Flock says. “If your sales company isn’t getting the film sold, maybe we can take over the sales.”

Flock notes that most producers “continue to work from a 20-year-old paradigm: they have some equity, some tax credits, some presales and they hold North America back as their — put this in quotes — ‘profit center,’ ” Flock says with a hearty laugh. “We’re kind of the backup U.S. distributor for a movie in the pre-buy phase. For us to do our jobs internationally, you need to land a distribution deal in the U.S. to drive sales. If you’re unable to do that, we could step in and release the movie for you.”

W2 plans to tackle six review-driven arthouse releases per year and six ancillary premieres. “As a distributor and sales company, we have our own intelligence on what a movie is going to be worth when it doesn’t work,” he says.

Flock’s short-term goals are to initiate more projects that have domestic theatrical potential by providing tax credit financing, putting up a minimum guarantee against foreign rights and enlisting a domestic producer. In the long term, he hopes to strengthen his North American distribution arm, but sees the most immediate growth in the less-competitive Canadian market.

W2 seems to be off to a good start: it just announced the acquisition of U.S. distribution rights to the British coming-of-age comedy/drama “Toast” starring Freddie Highmore and Helena Bonham Carter (due in June) and North American distribution rights to one of its sales titles, Alexandre Rockwell’s comedy “Pete Smalls Is Dead,” featuring a cast that includes Peter Dinklage and Steve Buscemi.

Business can make for some strange bedfellows when attempts at synergy don’t quite happen.

“It’s funny — we’re focused entirely on English-language films, so we’re acquiring some from U.K.-based sales companies (such as their first theatrical feature, this year’s Canadian release “Essential Killing” from HanWay), but internationally we’re competing with these guys to get the titles in the first place,” he laughs.

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