Cannes’ Money Problems: Plunging Euro Leaves a Cloud Over Market

While there are sure to be some sales of buzzy film titles lighting up Cannes, there’s an ominous cloud hanging over this year’s market: the currency crisis in Europe and Russia. As a result, the financial underpinnings of several key film territories are at risk.

“The market in general is not healthy,” says Avi Lerner, chairman of Millennium Films and producer of “The Expendables” franchise. “We’re losing money territory by territory. Japan is not good. Russia is at zero because of the ruble. Europe is bad. Spain and Italy, over the last few years, have gone down. The only major territory we’ve seen growing stronger and stronger is China.”

But the Asian nation has its drawbacks, too — namely, a rigidly enforced quota system that makes it difficult for foreign films to get released, and a vast amount of piracy. But the Continent remains at the heart of the predicament: The Euro has steadily fallen in value against the dollar, and the ruble went into free-fall last year and is still climbing back from collapse.

“The last 12 months have been very challenging on the currency side,” concurs Richard Rionda Del Castro, chairman of Hannibal Pictures. “European buyers need more Euros now than ever to close a deal.”

Even with the market playing out on this unsteady global stage, there are plenty of alluring titles up for grabs. Agents and dealmakers are hopeful that the film packages they’re peddling along the Croisette will generate constant commerce.

After all, not all regions are in turmoil. The U.S. scene has grown brighter, although theatrical box office often disappoints after frenzied festival acquisitions wars. This year’s Sundance was white hot with seven-figure deals for indies like “Dope,” “Brooklyn” and “Me and Earl and the Dying Girl.” SXSW followed with more good news for the makers of “Hello, My Name Is Doris,” “6 Years” and Alex Gibney’s doc “Steve Jobs: The Man in the Machine.”

“There’s been positive activity since the first of the year, and we’re going to continue to see it,” predicts Rena Ronson, head of the independent film group at UTA.

One of the factors driving up prices is the growing presence of new digital players like Netflix and Amazon, along with deep-pocketed new distributors such as the Orchard. Netflix, in particular, is showing it wants to make a push into the movie business, freely spending for worldwide rights to Cary Fukunaga’s “Beasts of No Nation” ($12 million) and Jamie Dornan-starrer “Jadotville” ($17 million).

On May 15, Netflix’s chief content officer Ted Sarandos will deliver an address focusing on new distribution strategies — yet another sign that the streaming service wants to be taken seriously as a power player in the film world, just as it upended the television industry with series such as “House of Cards” and “Orange Is the New Black.”

“Netflix has become more and more aggressive,” says Christian de Gallegos, president of Intl. Film Trust. “They are not as active as some foreign distributors, but that could change.”

Increasingly, more major movie stars have been showing up on the Croisette to hawk their films to buyers from international territories — even before cameras have started rolling on those projects. Last year, Matthew McConaughey appeared with Gus Van Sant to peddle “Sea of Trees” (and accidentally spoiled the script’s twisty ending), and the two are returning for its premiere at this year’s festival.

But in an era where eye-popping visual special effects and franchise brands are the true film royalty, there are fewer and fewer names that can guarantee a packed room. “There are only 30 stars in the world who can greenlight a movie,” says Del Castro.

With star power waning, creativity is king, particularly now that consumers are inundated with smallscreen and digitally delivered entertainment. “Film audiences are more selective than ever, so you have to have a really exciting and unique film for them to show up,” notes Mimi Steinbauer, president and CEO of Radiant Films International.

Against new financial realities, some of the key players are showing signs of belt tightening. There aren’t expected to be as many blowout bashes, like last year’s Lionsgate extravaganza for “The Hunger Games,” where guests were transported by bus to a $340 million sprawling mansion just off the Mediterranean. Even habitual bash-giver Vanity Fair won’t be hosting a party.

Still, the allure of Cannes can’t be beat for many filmmakers. Director Trey Edward Shults, whose feature “Krisha” won the grand jury prize at SXSW, recalls bursting into tears when he received the call that his picture would be competing in Critics’ Week at Cannes. “It’s humbling,” Shults says. “It’s the dream festival. It will help get my movie out there all over the world.”

More Film

  • Marisa Liston

    Sony Veteran Marisa Liston to Lead Lionsgate Movie Publicity

    Lionsgate has named Sony Pictures veteran executive Marisa Liston to lead all feature film and motion picture group publicity and communications strategy. Liston, who departed Sony in late 2018 after 17 years, has been assigned the newly created title of head of global earned media and communications. She will oversee domestic and international feature film [...]

  • Studios Spurn WGA Request to Ban

    Studios Reject WGA Request to Ban Non-Franchised Talent Agents

    Studios have rejected a request by the Writers Guild of America to bar talent agents if the current franchise agreement expires on April 7, saying it could expose them to extensive legal damages. The WGA will hold five days of member voting starting March 27 on a proposed “code of conduct” eliminating agency packaging fees [...]

  • Colin Firth

    Colin Firth's Fantasy-Drama 'The Secret Garden' Bought by STX

    STXFilms has acquired North American distribution rights to “The Secret Garden,” a movie adaptation of the beloved children’s novel that was in development at Global Road Entertainment for the past year. The film stars Oscar winner Colin Firth and Julie Walters. Marc Munden (“The Crimson Petal and the White”) directs from a script by Jack [...]

  • Frank Grillo Hell on the Border

    Frank Grillo Signs With CAA (EXCLUSIVE)

    “The Purge” star Frank Grillo has signed with CAA for representation, sources tell Variety. Grillo’s long list of credits includes “The Purge: Anarchy,” “The Purge: Election Year,” “Captain America: Winter Soldier,” “Captain America: Civil War,” “Wheelman,” and “Warrior.” On the TV side, he was the star of the Audience drama series “Kingdom,” which also starred [...]

  • The Top 10 Portrayals of Record

    Music Executives on Screen: 10 Memorable Movie Portrayals

    In the Netflix biopic “The Dirt,” Pete Davidson of “Saturday Night Live” fame portrays A&R exec Tom Zutaut, the man who signed Motley Crue to Elektra and Guns N’ Roses to Geffen, while veteran character actor David Costabile (“The Wire,” “Billions”) is manager Doc McGhee. They follow in a long and illustrious line of label [...]

  • Korea Box Office: "Money" Wins Debut

    Korea Box Office: 'Money' Defeats 'Captain Marvel'

    Korean crime drama “Money” debuted on top of the South Korean box office, preventing “Captain Marvel” from topping the chart for three consecutive weekends. It is the story of a young stockbroker who dreams of riches but becomes caught in a stock market scam. Opening on Wednesday, the Showbox release earned $12.0 million from 1.54 [...]

  • Us Movie

    'Us' Cements the Box Office Power of Jordan Peele

    Given the breakout success of “Get Out,” it’s no surprise audiences were salivating to see the next nightmare from the mind of writer-director Jordan Peele. “Get Out,” which landed a screenwriting Oscar for Peele, became one of the most profitable movies of 2017 (grossing $255 million globally on a $4.5 million budget) after the horror [...]

More From Our Brands

Access exclusive content