Indies’ lesson in ’96: more may mean less

HIGH POINTS: While some indie honchos continue to up production values in hopes of escaping the direct-to-video morass, it was the increasing abandonment by the majors of less-than-blockbuster territory that allowed smaller movies to shine in 1996.

Few of the 1996 crop of specialized releases came close to grossing the $15 million racked up by the Samuel Goldwyn Co.’s “The Madness of King George,” last year’s top specialized indie hit. But much to the chagrin of the majors, Golden Globe noms for Sundance hit “Shine,” “Big Night,” “Lone Star,” “Fargo,” “Breaking the Waves,” “The English Patient” and “Secrets & Lies” may foretell a bounty of statuettes for independently produced pics come Oscar time.

But the problem of a congested marketplace dogged indie companies throughout the year. “There are too many films on all levels, not only commercially but artistically,” October Films co-founder Amir Malin says.

The biggest wide-release indie ticket-sellers were Miramax’s Dimension-labeled “Scream” and Gramercy’s “Fargo” from the Coen brothers.

The trend toward studio split-rights deals, meanwhile, is best exemplified by Universal’s late-1995 release “12 Monkeys,” which was financed partly through an Atlas Films-led overseas partnership. The pic pulled in $57.1 million, the heftiest 1996 domestic gross for a film with some claim to indie paternity.

Orion’s release of Live Entertainment’s “The Substitute” and “The Arrival” rustled up high B.O. numbers relative to other indie titles. However, Live’s dissatisfaction with those numbers relative to the cost of those films was evidenced by Live’s announcement of a move into distributing its own wares in 1997. Meanwhile, Sundance Festival title “Big Night,” a word-of-mouth hit from Rysher Entertainment, has provided critical raves and a fine feast at the B.O. for Orion.

Of the non-studio-aligned specialized releasers, October Films scored with its Mike Leigh-helmed drama “Secrets & Lies,” a Palme d’Or winner at Cannes. October’s slate included Abel Ferrara’s “The Funeral,” which went overseas through MDP Worldwide, and “The White Balloon,” the New York Film Critics Circle winner for foreign-lingo pic. With “Breaking the Waves” also making many critics’ top 10 lists, October has to be judged the top non-studio-aligned niche-pic performer of the year.

October has Leigh’s next effort, “Career Girls,” lined up for later this year.

Sony Classics released John Sayles’ highest-grossing film ever, “Lone Star.”

In addition to “Big Night” and Fine Line’s “Shine,” two more 1996 Sundance film fest favorites, “The Spitfire Grill” – acquired for a whopping $10 million – and “Welcome to the Dollhouse,” have more or less lived up to their Park City promise in B.O. coin, with “Grill” taking in $12.65 million, and critical notices for Sony and Sony Classics.

OUTLOOK FOR ’97: If the majors cut output, as some have promised, their need to fill pipelines could put a squeeze on the indie acquisitions biz. Disney’s overseas distrib arm, Buena Vista Intl., unveiled a $200 million off-balance sheet acquisitions fund, and Disney-owned Miramax continued to outbid less well-heeled competitors, plunking down nearly $1 million for French-language “Ridicule” at Cannes.

Independent producers who count on major distribution, however, may end up bringing their business to the indie distribs. Also, some independent producers are hoping – somewhat wishfully – that cutbacks at the majors will lessen the demand for – and therefore the cost of – star talent.

Sundance will be the scene of intense bidding this year as the price of indie pics continues its upward spiral marked by the $10 million Castle Rock plunked down at last year’s fest for “Spitfire Grill.” Miramax paid an equal amount for “Sling Blade,” plus $5 million for “Swingers.”

Acquisition execs will be passing up time on the slopes to cover the Slamdance Festival as well, which may offer more budget-conscious acquisitions.

Largo Entertainment’s two high-profile outings, “Mulholland Falls” and “White Squall,” were box office disappointments for studio distribs. Largo’s new deal with Orion for domestic distribution of “City of Industry” and two other modestly budgeted pics could bolster its new line of wholly financed efforts.

After an Oscar win for “Antonia’s Line,” Overseas Filmgroup/First Look locked into a $27 million credit facility from Coutts & Co., then entered into a $24 million merger with Entertainment Media Acquisition Corp. The sales and distrib outfit headed by Robbie and Ellen Little has recently begun to fully fund a few pics; that initiative should bear fruit in this year.

Both Live and Trimark Pictures will be launching pics via newly revamped distrib divisions. “They have to do this to survive,” one distrib maven said, noting the continued slide of the video market. “It’s either that or close the doors.” Live’s buyout of Ann Dubinet’s Alchemy Films and her new position as head of international sales will give that company new energy. Live will be releasing Sidney Lumet’s comedy “Critical Care” in October.

Trimark’s Rodney Dangerfield vehicle “Meet Wally Sparks” will test the indie’s ability to handle a release on 1,400 screens.

John Kluge’s Metromedia-owned Orion Pictures completed the merger with Motion Picture Corp. of America and began assembling a yet-to-be-announced slate. Former MPCA co-founder (now Orion senior exec VP) Brad Krevoy promises “an aggressive acquisitions” campaign. Goldwyn, now owned by Kluge, will show what it can do under the Metromedia umbrella.

Disney-based Cinergi, headed by former Carolco co-founder Andy Vajna, has placed itself on the block. A successful rollout of “Evita” may put a forward spin on that sale.

On the overseas front, European companies such as the German-owned Capella and Italy’s RCS retreated from production activities in the wake of business reversals in Hollywood and at home.

Paramount-based Lakeshore Entertainment is poised to be a hot new player, having bought TransAtlantic Entertainment’s film library and turned TAE’s international sales operation into an aggressive overseas sales and acquisition team at Mifed.

At the same time, several Gallic companies are actively producing films in the U.S. Between Ciby 2000, Hachette Premiere and Lumiere, at least six titles are in the “made in America” category. That includes the new Wim Wenders project “The End of Violence,” David Lynch’s “Lost Highway” and Nick Cassavetes’ “She’s De Lovely,” toplining John Travolta.

Bruce Davey and Mel Gibson’s Icon Entertainment bought foreign sales and finance company Majestic Films for $10 million, while Majestic’s founder, Guy East, set up his new company, Intermedia, with a view toward making longterm deals with a handful of distribs, as well as signing up with Tony and Ridley Scott for Scott Free’s low-budget pics.

And as always, the American Film Market (Feb. 27 to March 7) beckons buyers and sellers for another round. And a new wrinkle in the marketplace will be the celebration surrounding the 50th Cannes Film Festival, which international film business folk will have to deal with as either a boost to, or a distraction from, the business of buying and selling films.

But the big news was the U.K. lottery as a source of film funding. U.S. companies are already scheming to buy a ticket that will allow them a share of the subsidies.

Emerging Brit talent included helmer Danny Boyle, whose sardonic junk opera “Trainspotting” – toplining another emerging star, Ewan MacGregor – was a worldwide hit for Film Four, but performed below theatrical expectations for Miramax domestically, taking in $16.5 million.

“Shine” helmer Scott Hicks has become a hot commodity along with the film’s star Geoffrey Rush, and both may find themselves in line for Oscars.