Cannes Mid-Festival Report: Strike it Rich Or Go Home Poor

The Irishman,” a period crime film that will pair Martin Scorsese with Robert De Niro and Al Pacino, sparked a heated bidding war that resulted in a record-shattering $50 million sale to STX Entertainment and galvanized this year’s Cannes Film Festival.

Less than two years old, the studio is a relative newcomer to the Croisette. It would be easy to read the move as a flag-planting of sorts, similar to Amazon’s massive $10 million purchase of “Manchester by the Sea” at the year’s Sundance or Netflix’s $12 million winning bid for “Beasts of No Nation” last year. STX, however, doesn’t see it that way.

“Everybody was quite keen to get involved with it,” said David Kosse, president of STX Entertainment’s international division. “It was intended as a business opportunity that fits within our plans. We weren’t making a statement. We were making a deal.”

Indeed had STX faltered in its pitch from the Scorsese passion project others were primed to strike. Fox, Lionsgate, Universal, IM Global, and Bloom were all circling the package and willing to spend big to land it. The reason comes down to supply and demand. “There is product. You can’t say there aren’t a lot of movies here. But what’s ultimately lacking are the few tentpole-type independent pictures that everybody wants, “ said Martin Moszkowicz of Germany’s Constantin Film.

A sprawling gap divides the price shelled out for “The Irishman” and the festival’s second-biggest deal: the $9 million that STX ponied up for “Molly’s Game,” Aaron Sorkin’s feature-film directorial debut. For the right project, one that features a top-shelf director and an A-list actor, the financial rewards can be great. But in today’s uncertain film market, there are fewer names that can demand that kind of cash.

The rest of Cannes has been a trickle of small deals for indies and some buyers are complaining — echoing a criticism at the Toronto Film Festival and Sundance — that the packages are underwhelming. There aren’t even that many A-list movie stars at this year’s festival. The biggest ones, “Money Monster’s” George Clooney and Julia Roberts, still dominate headlines, but haven’t appeared in a true blockbuster in years. “Money Monster” debuted stateside to a modest $15 million. It’s not clear if Clooney or Roberts alone would demand big bucks in pre-sales if they did have a package here.

Two years ago, Matthew McConaughey caused a stir when he arrived in the French Riviera to pedal pre-sales for a mysterious dramatic project, but that movie — entitled “Sea of Trees” — opened at last year’s Cannes to boos and still hasn’t made it to the United States.

“Good filmmakers with good material that’s what drives a business like ours,” said Nick Meyer, CEO of Sierra/Affinity, a film finance and production company that came to Cannes with six projects, including “Molly’s Game” and “Tully,” a comedy that reunites the “Young Adult” team of Diablo Cody and Charlize Theron.

Cannes, with its posh red carpet premieres, black tie Palais screenings, and history of celebrating auteurs makes a point of festishizing the movie-going experience. Stars who flock to the seaside retreat do so in part because no other festival better recaptures the glamour of Hollywood’s glory days. The reality though, is that the film business is in a period of transition. Streaming services and emerging technologies have made the old model of hitting up the multiplexes on a regular basis something of an anachronism to a rising generation and digital piracy poses an existential threat. These are the issues that keep moviemakers and studios up at night, whether they cop to them or not.

With the home entertainment market shriveling up, a new fiscal prudence has set in when it comes to sales for other films that lack a De Niro or Pacino above the title. That’s forced filmmakers and sellers to think more strategically.

“We know that the market is changing drastically and we know that independent foreign distributors are struggling to find commercial success,” said Nate Bolotin, co-founder of XYZ Films. “We’ve been trying to identify content and produce content that we feel has a surefire audience without a crazy price.”

Like most of the films that have hammered out deals at this year’s market, “Molly’s Game” and “The Irishman” were snapped up before before a single frame has been shot. Only a half dozen films have been sold upon completion, buyers tell Variety. Partly that’s because most of the film’s in competition came to the South of France armed with distribution, but it also reflects a new reality.

Amazon and Netflix, two new players with vast financial resources, have driven up prices for premium projects. Aiding their aggression is the fact that neither company depends on ticket sales to turn a profit. In turn, that’s forced other distributors, who need to make their money back through some combination of box office returns and home entertainment sales, to get involved with projects earlier in their development.

“People saw how competitive the markets were and they switched their strategy,” said Paul Davidson, executive vice president of film and TV for the Orchard. “They need to guarantee themselves a slate of films, and by going in ahead of time they’re avoiding a scenario where there are less movies and prices go up.”

That approach comes with its own risks, of course. The advantage of buying a finished film is that a distributor knows exactly what it’s getting. A project that looks like a surefire hit on paper can turn into a stinker by the time the cameras stop rolling. Even the greatest filmmakers have a dud every now and then.

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