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Will Hollywood Mega-Mergers Impact Cannes Film Market?

The U.S. movie business is undergoing a wave of dramatic consolidation.

Major studios are being swallowed up and indie players are dropping like flies. Though the Cannes Film Festival is unfolding an ocean and several time zones away from Hollywood, the aftershocks from the mega-mergers and bankruptcies currently roiling the entertainment industries will likely be felt by the executives and agents prowling the Croisette in search of movies to buy.

“There aren’t a lot of U.S. distributors, period,” said Martin Moszkowicz, CEO of Constantin Film, the producer of “Resident Evil.”

Twentieth Century Fox Film has been subsumed into Walt Disney Studios as part of a larger $71.3 billion deal. Under its new ownership, it is expected to release fewer than six movies annually, roughly half of what it once fielded in a typical year. That means that the number of major studios have shrunk from six to five. The independent film world seems to be teetering. Broad Green and Open Road have gone belly up, Annapurna is dialing down its ambitions after a series of flops, and STX and Lionsgate are flailing as they search for new film franchises.

Those companies that have survived this period of dramatic change won’t find many splashy titles for sale. There are a smattering of big-budget films on offer, including Roland Emmerich’s epic “Moonfall” and a “Cliffhanger” reboot that will trade Sylvester Stallone for a female protagonist. But these films have to contend with a new reality. Hollywood’s studios are taking fewer risks and releasing fewer films.

“You are certainly not going to see too many flashy big-budget movies being touted, just because the market can’t really afford that kind of budget,” said David Garrett, founder of the sales company Mister Smith Entertainment.

If studios do buy domestic rights to a movie, they often want part of international as well, which makes dealmaking more complex. Hardly any of even the big movie projects bowing at Cannes have U.S. distribution. Until they do ink a U.S. deal, which would guarantee an impactful marketing campaign, many foreign-based distributors will hold off on purchases. Buying at Cannes will, as a consequence, almost certainly remain as targeted as the movie projects themselves.

In contrast, this year’s Sundance Film Festival was red hot despite the systemic issues facing the movie business. Amazon Studios returned to dealmaking with a vengeance, while Netflix was also active. However, the Berlin Film Festival, unfolding just a few weeks later, was notably slower and smaller when it came to sales.

A few films are drawing buyers’ attention. It’s expected to be standing room only when Stuart Ford’s AGC Studios unveils Emmerich’s “Moonfall,” which is budgeted at $150 million, in an intimate presentation to buyers on May 15 at the Carlton Hotel. AGC Studios’ Michael Rothstein said the film is “in the spirit of ‘2012,’ with Roland wreaking joyful cinematic havoc on our planet as only Roland can.”

Also drawing interest are Michael Polish’s hurricane-set actioner “Force of Nature” with Mel Gibson and Kate Bosworth, and Voltage Pictures’ action-thriller “The Minuteman” with Liam Neeson.

But “the number of higher-profile films seems significantly reduced from years past — and there are absolutely (fewer) big-budget films,” said Rothstein.

Most of the films for sale aren’t on the level of “355,” a spy thriller with Jessica Chastain and Lupita Nyong’o that captivated buyers at last year’s Cannes. But what the market lacks in sizzle it makes up for in depth.

“It’s better than over the last two years in volume, and quality,” said Moszkowicz.

“Despite all the uncertainties, it is actually an exciting time if you have capital and access to talent,” added Harold van Lier, at Anton.

With the U.S. market looking dicier, some foreign territories could help plug the gap. China, for instance, has a growing appetite for science-fiction movies and family fare. But in a risk-averse environment, many of Cannes higher-profile movies are keeping a tighter rein on costs. Many have budgets below the $20 million to $25 million range.

These include Bankside Films’ “Let Me Count the Ways,” with Emilia Clarke as poet Elizabeth Barrett; See-Saw Films’ “The Power of the Dog” from director Jane Campion with Benedict Cumberbatch and Elisabeth Moss; and the STX Intl. thriller “I Care a Lot” with Rosamund Pike. As for family entertainment, Kate Winslet voices the horse in Constantin’s “Black Beauty” and Mel Gibson plays Santa Claus in Fortitude’s “Fatman.”

“Cannes is unique,” said Rocket Science founder Thorsten Schumacher, the producer and sales agent of the “Cliffhanger” reboot. “In a very small place, in very short time, a lot of people with a lot of energy, enthusiasm, ambition and resources come together. You cannot beat that.”

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