Cannes Preview: Let the battles begin

Hype flexes muscles at market

HOLLYWOOD — The economy may not be in overdrive, Vivendi Universal and the Kirch Group are in disarray, but all indications point to an upbeat Cannes market, with more buyers looking for product as international sellers shore up their positions and the film world looks for a happy ending.

Over the years, Cannes has morphed into one of the top promotional vehicles in the Western world, and the thousands of journalists from around the world that descend on the mart ensure that everything will get some press.

Camera crews roam up and down the Croisette, desperate for something to bring to their producers, hoping for a self-promoting starlet to disrobe, or set herself on fire, as was the case a couple of years ago.

And although market conditions are causing some grief, the fest this year will be abuzz with star power as Miramax and Initial Entertainment Group present a long-awaited first glimpse of Martin Scorsese’s period epic “Gangs of New York.”

Approximately 20 minutes of footage will screen in official selection, an unprecedented move by the fest to embrace an unfinished pic, with Scorsese — who’s the short-film jury prez — and “Gangs” stars Leonardo DiCaprio and Cameron Diaz expected to be prominent on the red carpet.

The foreign box office has become so important to films that using the stage of Cannes and its market to build worldwide recognition for a film — whether it’s finished or not — is a no-brainer.

New Line created big buzz last year with “The Lord of the Rings: The Fellowship of the Rings” when it screened 20 minutes for the press and threw an elaborate party.

Journos who saw footage came out believers, and glowing press was almost assured. Film went on to gross more than $820 million worldwide. Miramax looks to replicate that plan with “Gangs.”

The platform afforded by the hothouse atmosphere of the fest attracts a circus. Underground indie Troma Films is a fixture on the Croisette, as characters from its low-budgeters such as Toxie the Toxic Avenger and Sgt. Kabukiman pose for pictures with tourists, mug for TV cameras and promote Troma’s films — which rarely reach an audience beyond the midnight-screening circuit.

But they are there, and everyone in the film business recognizes and knows who and what they are. There’s also a parallel porn fest.

Vanity Fair recently began hosting a party at Cannes, attracting stars, power players and jet-set glitterati. This year, editor Graydon Carter will be promoting at the festival the Robert Evans bio-doc “The Kid Stays in the Picture,” which he co-produced.

Last year, DreamWorks used Cannes brilliantly to launch “Shrek” overseas, which went on to gross in foreign territories. It is bringing its new animated offering, “Spirit: The Stallion of the Cimarron,” to unspool, albeit out of Competition, this year.

While the promotional circus rolls on, U.S. acquisitions execs trolling the Croisette are likely to be in a buoyant mood due to an upswing in U.S. production and the slight rebounding of the U.S. economy.

“The bad news is the international sales business is affected by the economies of various countries and is hurting like every other business,” says Sony Pictures Classics co-prexy Michael Barker. “The good news is that people are going to movies in bigger numbers than ever.”

Barker also points out that this year’s festival/market is expected to provide more product from the U.K. and U.S. than in recent years.

Several American studio buyers seem optimistic that there will be some interesting pre-buys, but say that completed films, as usual at Cannes, will likely tend toward the arthouse.

Scripts likely to be hot contenders are Pathe Intl.’s “In the Cut,” starring Meg Ryan; Hanway Films’ “Paris ’68,” from Bernardo Bertolucci’s; Myriad Films’ “Borgia” as well as titles in production or development such as Miramax’s “Kill Bill,” “Confessions of a Dangerous Mind” and “Dirty Pretty Things.”

Adding to U.S. execs’ good humor is the solid box office business of last year’s Cannes pickups including USA Films’ “Monsoon Wedding” and IFC Films’ “Y Tu Mama Tambien.”

“As far as acquisitions from U.S. companies, I think the mood is fairly good,” says IFC Films senior veep Bob Berney. “Overall, the theatrical business is in pretty good shape right now in the U.S. based on the first and second quarters, and you can never rule out a pretty robust acquisitions market at Cannes.”

Many are also wondering what effect the collapse of the Kirch Group in Germany, and the senior management changes at Canal Plus and upheaval at parent Vivendi Universal will have on the global film biz.

“Any time you have the removal of a significant buyer, there is a ripple in the marketplace, and in the current climate it makes things more problematic for the independent sector,” says Joe Woolf, a principal in the entertainment and media consulting unit of L.A. investment firm Gerard Lauer Mattison.

“It’s kind of a funny thing about the market right now though. The fundamentals are fine, but in many instances each individual country is going through significant changes and consolidation,” he adds.

Says international sales veteran Robert Little, prexy and co-chair of First Look Media: “As a general rule, until the major TV networks around the world stabilize their own business and recover from the slump in advertising, they will not be buying in the same way as before, which means distributors will not have sufficient confidence in their ability to sell TV rights to films they’re distributing. This all needs to be worked out — the question is, how long will it all take?”

Artisan Entertainment’s CEO Amir Malin agrees, noting: “In Germany and Italy, for example, the TV entities are not buying and the international business is driven by TV. If RTL and Kirch in Germany aren’t buying, it puts more pressure on distributors in Germany to reduce their license fees.

“There are just a lot of problems internationally right now.”

As Alison Thompson of Pathe Intl. sums up, the European TV market is in a dismal state and there is no sign whatsoever of it improving.

Stateside, agents specializing in the international and indie sectors are more cautious about taking risks on projects they feel they cannot sell even if it has a great script and great actors.

“It’ll be only the top, top product at script stage that’ll be able to pre-sell at Cannes this year and I think everything less will go wanting,” says UTA’s Howard Cohen.

The problem, says Capitol Films veteran U.K. sales and financing exec Jane Barclay, is not in finding product to sell but in locating distributors to support it.

“With Germany having virtually disappeared, and a squeeze on TV sales in Italy and Spain, and to a certain extent France, it’s difficult finding projects that stack up financially,” she explains.

To address this very issue, some sellers are coming up with some solutions.

Miramax chairman of worldwide distribution Rick Sands says the company will provide bonus footage — cut specifically for TV — for distribs to use as promotional material on their channels. It also is ensuring talent will travel to promote pics.

Sands says, “Right now, if you have a movie with no stars and unknown directors and festival exposure it’s going to be nearly impossible to sell and that’s going to be a big frustration in Cannes.”

Graham King of Initial Entertainment Group says he is anticipating announcing a couple of new high-profile films for the marketplace. But many of the movies that the major studios are willing to lay off foreign rights to are in the $40 million-$60 million range, the danger zone for most international sellers who cannot cover these budgets any longer out of foreign.

“You either take a risk on a $100 million movie with an A-list director and cast or you pass,” says King. “You can’t afford to take a risk on a project you might not be able to sell in certain territories because the numbers are down everywhere and you can’t make that short fall up.”

Anyone for a cocktail?

m Dawtrey in London contributed to this report.