The voracious 2005 Sundance acquisitions market was noteworthy not just for number of big-money deals, but for the complexity of the deal-making.
There are more splits rights deals and more backend guarantees. Films no longer sell to the distributor willing to pay the highest advance. It’s no longer about being the first person to run through the snow with an open checkbook.
Buyers and sellers are more like studio accountants. They have sophisticated reps, armed with reams of sales data, conversant in contractual arcana like gross corridors and break points.
By the time the fest wrapped on Sunday, more than a dozen films found distribution deals; another dozen were well on their way.
ThinkFilm is currently negotiating with a number of potential partners, including MTV Films, about creating a partnership on its doc “Murderball.”
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ThinkFilm holds worldwide distribution rights and has no interest in letting another company take over the film, but it’s discussing the possibility of accepting outside investment in exchange for a larger marketing platform. If all goes well, the rationale goes, “Murderball” could cross over to larger audiences and all parties would share in the wealth.
Producers for docs “Unknown White Male” and “The Education of Shelby Knox” were considering not only distribution deals but also feature remake rights.
Even Sundance’s second cousin, Slamdance, has broken into the big time, with Paramount Pictures and Nickelodeon Films negotiating to acquire the festival’s opening night film, documentary “Mad Hot Ballroom.”
Said one producer, somewhat baffled by his good fortune, “I don’t even know what to ask for.”
“Financers are less willing to give up the backend as these movies work on a broader level,” says UTA agent Jeremy Barber, who was part of the team that repped Craig Brewer’s “Hustle & Flow” to Paramount Pictures and MTV Films.
Although the Paramount deal calls for a $9 million advance, the studio’s winning play was giving producer John Singleton two put pictures budgeted at $3.5 million each.
“Filmmakers have become far more savvy about holding on to the upside,” Barber says.
Some producers are building greater profit participation into their production budgets. Like the founders of InDigEnt, Paul Allen’s Vulcan Prods. keeps its budgets down by asking cast and crew to take smaller salaries. Then, when it came time to sell the pic, William Morris Agency and Traction Media negotiated a smaller advance in exchange for significant gross participation.
David Slade’s “Hard Candy” went to Lions Gate Films, which agreed to give the filmmakers 20% of the pic’s gross.
ThinkFilm U.S. distribution head Mark Urman said the trend toward more-elaborate dealmaking “is symptomatic of the Sundance explosion. So many people want in and witnessed the transforming experience that happened last year with so many films going on to have a rather smashing destiny. Nickelodeon and Slamdance? What does that mean? But that’s delightful if it works for them.”
High-level Sundance dealmaking can be traced back to “The Blair Witch Project.” In 1999, the fest’s business culture focused almost entirely on the value of the advance. But when Artisan Entertainment and Summit Entertainment jointly acquired “The Blair Witch Project,” the companies instituted a series of box-office bumps in an effort to keep down the amount of money they needed to pay up front.
The film finally grossed $249 million worldwide and, after a long dispute during which Artisan seemed unwilling to pay, the Blair Witch team was very rich.
Today, there’s nothing accidental about the backend potential of Sundance deals. The total advances on last year’s “Saw,” “Garden State,” “Napoleon Dynamite” and “Open Water” barely top $10 million, but the pics have earned $157 million in domestic release. All are expected to enjoy rich DVD afterlives.
These newfangled deals may take longer to negotiate, but they seem more sensible in the long run. Historically, big advances haven’t translated to big business. Buyers and sellers remember all too well the sad case of Miramax Films’ “Happy Texas” ($10.2 million advance) or Castle Rock Entertainment’s “The Spitfire Grill” ($10 million advance).
Still, sometimes the magic doesn’t work. Last year’s grand prize winner at Sundance, Shane Carruth’s “Primer,” was acquired by ThinkFilm for North America shortly after the festival. The deal was weighted toward the back end, but the film grossed just $425,000.
John Pierson, a former producer’s rep whose sale credits include “Clerks,” “Slacker,” She’s Gotta Have It” and “Roger & Me,” still puts stock in the old approach to Sundance dealmaking.
“Get it up front. That’s your bond,” Pierson says.
But a new generation of dealmakers has come to the fore in Sundance. And it’s no coincidence that Pierson isn’t selling any movies this year. Instead, he’s starring in his own movie, “Reel Paradise,” a documentary about his family directed by Steve James.
Cathy Dunkley and Ian Mohr contributed to this report.