Enthusiasm for movie business may be subsiding
LONDON — Two years after Len Blavatnik’s Access Industries bought Icon’s U.K. distribution and foreign sales operations, with big plans to expand Icon around the world, all signs seem to indicate that Access’s excitement with the film biz is cooling.
The grand plans for Icon’s global expansion have long been abandoned, while a strategic alliance announced a year ago with the Weinstein Co. has come to nothing.
Now Blighty’s film biz is abuzz with reports that Access is shopping Icon’s U.K. library to potential buyers, following the distrib’s recent weak performance.
The possible sale of that library, which includes titles such as “Drive,” “A Single Man” and “Precious,” would leave Icon to simply focus on the foreign sales business. However, the company is also struggling to attract new projects for its international arm, with Access providing only limited support.
Perhaps it’s that the U.S.-based industrial group has bigger fish to fry. The company acquired Warner Music in May for $3.3 billion, and is now the favorite to snap up EMI’s recorded music arm, which has been put on the block by Citigroup. Icon is a small concern by comparison, and Access seems unwilling to invest more cash or management time in growing the business.
Access and Icon refuse to comment. But one insider confirms Access is open to offers for its U.K. distribution arm: “It’s like one of those things you have that doesn’t make a huge difference to you, and you want to sell but only if the price is right.”
Icon’s U.K. arm looks set for its worst year at the box office since 2006. With a gross of £7.4 million ($11.8 million) so far, the company will be lucky to make half of its 2010 and 2009 box office takings, which sat at $26.3 million and $26.8 million, respectively.
While Icon U.K.’s 2010 slate was peppered with some moderately successful releases, including “Edge of Darkness” ($5.9 million) and “A Single Man” ($5.1 million) there were a slew of misses as well, including Gurinder Chadha’s “It’s a Wonderful Afterlife” ($1.5 million) and “The Box,” ($1.9 million).
So far in 2011, only two pics have passed the £1 million ($1.5 million) mark: “Drive” ($4.1 million and counting) and “West Is West” ($4.3 million).
Some rival distribs even say they were approached by Access as long as six months ago to assess the value of the U.K. library.
Two years ago, under the direction of former PolyGram and UIP topper Stewart Till, the intention was to set up Icon as an international distribution network that could rival the likes of other major indies in the European market and further afield.
The backing of Blavatnik, a Russian-American billionaire, coupled with Till’s expertise signaled what seemed to be a big future for the company.
Till kicked the tires of several distribs in Italy, Spain, France and Germany, but could not find suitable acquisitions at a realistic price. At the same time, a series of U.K. theatrical failings cooled the enthusiasm of Access for further expansion in the distribution business.
A year ago, Access told Till to retreat back to Blighty and focus on fixing the U.K. operations and building up the foreign sales arm.
However, this was not what Till, an advocate of the multiterritory distribution philosophy, wanted. So he moved from CEO to a part-time role as chairman, while Hugo Grumbar and Ian Dawson became joint managing directors, with Grumbar handling international sales and Dawson the U.K. operation.
In January, Icon laid off 15% of its staff. In an effort to cut costs, certain pivotal roles were merged including head of home entertainment and head of marketing.
Rumors were rife that Grumbar and Dawson were given a year to show results or the company would be shut down.
Since then, Icon’s international sales operation has handled pics such as “Coriolanus,” which was sold to TWC in Berlin, Sundance hit “Project Nim” and the yet-to-be released Mel Gibson pic “How I Spent My Summer Vacation.”
At Cannes, Icon launched presales of the $20 million spoof “The Biggest Movie of All Time 3D,” which was supposed to start shooting in November. It lined up a healthy $12 million in commitments from distribs, but with Access unwilling to cover the gap in a timely fashion, Icon was unable to close the financing on schedule, and the producers have been forced to postponed production while Icon continues its efforts to piece together the budget.
Last year, before the American Film Market, Icon announced it was launching a new film financing alliance with the Weinstein Co. Under the deal, Icon and TWC would jointly identify projects in the $5 million-$20 million range, which Icon would bankroll and TWC would distribute in selected territories. Both companies announced that the fund could reach $100 million over its initial two-year period.
One year later, however, and the relationship has borne no fruit. One insider suggests that after the splashy announcement, Icon never ended up signing the deal, after its execs realized that the terms were stacked against the company.
Indeed, for the past year, Icon seems to have spent more time pulling out of deals than consummating them. Last week, Icon went into arbitration with River Road Entertainment, the producers of Terrence Malick’s “The Tree of Life,” after cancelling a plan in April to distribute the pic in Blighty.
The U.K. distribution company’s most significant acquisition this year has been the low-budget horror pic “You’re Next,” which Icon pre-bought for a low-six figure sum from HanWay Films at Cannes. The horror-thriller was one of the buzz titles at Toronto this year, selling to more than 30 territories; Lionsgate snapped up U.S. rights in a low seven-figure deal. But Icon’s U.K. release will follow the U.S. release, which isn’t skedded until next year.
“It’s a crowded landscape here in the U.K.,” says one source. “And Access don’t seem to be giving Icon the backing and support they need to make themselves a formidable player. Perhaps it’s a question of experience and infrastructure, but rumors are rife and people are hesitant to give them films because of that.”