Dealmakers Impact Report 2012
Illustration by Variety. From left: Mimi Steinbauer, Avi Lerner, Patrick Wachsberger, Joe Drake, Nicolas Chartier and Glen Basner
As the major studios focus on making fewer, bigger tentpoles, thus reducing their title output, foreign sales moguls are moving into the void and playing an increasingly central role in Hollywood dealmaking.
Once regarded as a bunch of renegades dragging a suitcase of garish posters from one market to the next, many sales agents have evolved into production powerbrokers, with the right combination of creative skills, financial ingenuity and international relationships to make serious movies happen — from commercial blockbusters such as “The Hunger Games” to Oscar winners like “The Hurt Locker.”
“This is an era of large, well-capitalized sales companies,” says Myles Nestel of the Solution Entertainment Group.
“What we have seen in the past three to four years is a number of more prominent independent financiers becoming more active in the mid-budget, star-driven films that used to be made by the major studios,” agrees Stuart Ford of IM Global.
Patrick Wachsberger, co-chair of Lionsgate Motion Picture Group, and Guy East, co-chairman of Exclusive Media, were the first to make this transition two decades ago, but they have been followed by a slew of indie players who have worked their way from the market booth to the executive suite.
The likes of Joe Drake at Good Universe, Glen Basner at FilmNation, Ford at IM Global, Nick Meyer at Sierra/Affinity, Nicolas Chartier at Voltage and Avi Lerner at Nu Image/Millennium have proved their ability to marry premium material and A-list talent with complex international financing structures.
“The days when a writer or director could walk into a studio with a project and someone would write them a check for the whole budget are gone, and the studios themselves are often looking for partners,” Drake says. “So our international knowledge has become one of the more valued and powerful skillsets in the business.”
He adds that the creative community is reaching out much more willingly and aggressively to sales agents to get their movies made, and the international companies have broadened their expertise to learn the creative side of the business.
For Hollywood producers and talent who are more used to working within the studio system, this means adapting to a different style and rhythm of dealmaking, as projects are packaged and greenlit to the cyclical tempo of the indie market calendar — Cannes in May, the American Film Market in November and Berlin in February.
“There’s no doubt these commercial cycles around the big markets still drive packaging, even though there’s no production logic to that,” says Exclusive CEO Nigel Sinclair. “If anything, the markets have become more important in galvanizing the key talent agencies. It requires so much human willpower to get all the elements of a project together, that it always seems to need an element of crisis to do that.”
Talent can be wary of allowing their names to be used, and potentially tarnished, by being touted speculatively around markets. But actors and their reps increasingly understand that’s the way the indie game is played, and if they don’t, the big agencies now have their own indie divisions to explain the rules.
Enticing the right cast remains key to getting an indie project financed, but that increasingly means investing in quality material. “The script gets the director, the director gets the cast,” Nestel says.
“Studio box office is driven less by actors than by concept and marketing, but in the independent market, we still need the right cast with the right director because we are driven by pre-sales,” Chartier says.
Sinclair adds that in a minority of cases, an outstanding script alone can be enough to generate significant coin. “All the big foreign distributors now have highly sophisticated English-language readers who read everything very carefully, so sheer excellence in a screenplay will bubble to the top.”
It’s a juggling act to make sure all the creative and financing elements come together simultaneously, so that the key talent can be locked into pay-or-play deals. “You need cast in order to put the financing in place, but you need financing to put the cast in place, so it all has to happen at the same time,” says Mimi Steinbauer of Radiant Films Intl.
For the sales companies, the key is to prove they can be trusted to deliver on their promises — to the talent, the buyers, the banks and the equity players. “It’s down to our estimates,” Basner says. “Our reputational value toward the financing community is based on whether we have sold films before at the level we predicted. And it’s not just about having films that are saleable, it’s about having films that are profitable for our distributors.”
As projects have gotten bigger, so have the risks. “The complexity of the dealmaking has changed dramatically, because the stakes have gone up,” says John Burke of law firm Akin Gump. “The equity needs are higher, so negotiations for how to get that money back have become much more complex.”
The sales moguls sit at the heart of that high-wire dealmaking process. “It’s the fun part,” Drake says. “It’s about aligning our interests financially and creatively with the talent, and treating everyone equitably. But within that, things can become very complicated.”