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

Cannes Market Buyers Currency Crisis
Kagan Mcleod for Variety

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.”