Foreign sales ops, output deals complicate strategy

How the Summit-Lionsgate merger plays out overseas will be interesting both in terms of its foreign sales operation and Summit’s existing output deals across a raft of territories.

As it stands, sources indicate that Summit’s and Lionsgate’s sales operations will continue as is for the rest of 2012, with both operations (Summit’s headed by David Garrett and Lionsgate’s by Helen Lee Kim) reporting to Patrick Wachsberger. As Summit’s entire operation mushroomed from international sales, dealmakers appear keen for the sales arm to stay intact under the eye of a Summit exec.

As for output deals, Summit has a raft of contracts set up in countries including Blighty (eOne), Spain (Aurum), Australia (Hopscotch/eOne), Russia (Central Partnership) and Germany (Tele Munchen).

In addition, Summit funnels its own productions in Latin America through IDC Films, a joint venture with NuVision founder-director Pedro Rodriguez.

Insiders reveal that, at present, these existing deals will be fulfilled until the end of 2012 at least. How existing contracts will pan out after that remains to be seen. EOne and eOne/Hopscotch both renewed output deals last year for three years while exclusive six-year outputs with Central Partnership and Tele Munchen and a three-year output with Aurum were inked pre-AFM in November.

While these deals can be viewed as attractive assets to Lionsgate, Summit’s biggest cash cow internationally has undoubtedly been the “Twilight” franchise, with other Summit product generally performing tepidly at the box office.

In Blighty, the four “Twilight” installments have generated more than $150 million for distrib eOne (including $16.3 million from the first installment with Contender, before eOne’s acquisition) while in Spain the franchise has grossed more than $95 million.

Going forward, the company can decide under which banner to greenlight pics and whether Summit would be the most attractive option given an existing an output deal.

The territory that will most feel the affects of the merger in the longterm is the U.K., where Lionsgate already has a thriving distribution hub. After the three-year contract with eOne is seen through, it would make more sense for the company to funnel production through its own operation.

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