As well as causing a humanitarian and geopolitical crisis, the seismic fall-out of Russia’s invasion of Ukraine on Feb. 24 has reverberated across the film industry locally and globally. The effects, insiders tell Variety, will be felt for decades. In terms of distribution, they may even be permanent.
Russia’s designation as a pariah state has seen major film festivals such as Venice and Cannes bar the presence of Russian government agencies and state-backed content at their events, while global companies and studios including Disney and WarnerMedia have paused all activities in the country.
Inevitably, these restrictions have also impacted Russian filmmakers who are critical of their country’s president, Vladimir Putin — and the sales agents and distributors handling their movies.
France-based Pulsar Content represents “The Execution,” Lado Kvataniva’s Russian thriller, which world premiered at Fantastic Fest in Austin, Texas. Last month, it was pulled from the Glasgow Film Festival.
“We’ve already sold it in many countries and distributors we’ve spoken to are behind it; they want to keep supporting talented auteurs,” Pulsar Content co-founder Marie Garrett tells Variety. Yet despite the support, Garrett acknowledges that the film’s release will now likely be delayed.
Before Russia’s invasion of Ukraine, Garrett had been working on selling another film, “Olga” by Elie Grappe, to a Russian distributor. A coming-of-age tale about a Ukrainian gymnast living in exile in Switzerland, “Olga” would have been a bold move for a Russian banner considering the film, which bowed at Cannes’ Critics Week, gives a Ukrainian perspective on the Euromaidan revolt, which erupted in Kyiv in 2013.
But now, Russian distributors, many of whom are also against Putin’s oppressive regime, are seeing both their country and their livelihoods collapse. “One of them told us, ‘It’s as if I went to sleep in Russia and I woke up in the Soviet Union,’” says Garrett. Many of her regular contacts in Russia have disappeared from social media because they’re afraid.
Even companies that want to continue working with independent Russian distributors are impeded by the financial sanctions against Russia, which means no deals can get done now or in the foreseeable future.
“There is no new business with Russia because you can’t contract. It’s all frozen. You can’t rely on getting paid,” says one senior U.S. film executive. “How can they pay you if there’s no possibility to recoup and collaterize with banks?
“[The] longer this goes on, and the more ravaged the Russian economy becomes, the longer it will take to normalize,” he adds, noting that Russia has, to date, been an important market, especially for commercial movies.
“It’s a huge headache because [Russia] is what I would call a ‘mini’ major territory,” agrees Charlie Bloye, chief executive of Film Export U.K. “Maybe it can’t be classed as a major territory alongside France and Germany, but for the right film, it was getting there. It was a very valuable territory.”
The situation has created an even bigger headache for French sales agents because, according to Laurent Danielou, the founder of Paris-based Loco Films, Russia was the number one foreign market for French movies in terms of theatrical admissions. As far as the overall international business, Danielou says Russian deals represented roughly 5% of sales revenues.
In part, that’s because Russian distributors had a habit of snapping up not only Russian rights but also former Soviet countries, known as Commonwealth of Independent States (CIS), which includes Ukraine. CIS countries would then sub-license the rights from Russian companies for their own territories.
Now that Ukrainians have sworn a total boycott of Russian businesses, however, there is discussion about whether the ongoing war could ultimately change Russia’s role as Eastern Europe’s traditional alpha market.
This is not the first time buyers and local distributors have tried to prise rights away from Russia. Danielou says he started excluding Ukraine from Russian deals as far back as 2014, when Russia invaded Crimea, “because Ukrainian distributors refused to buy from Russian companies.”
And in recent years, the Baltic states — Lithuania, Latvia and Estonia — have banded together to carve out their own rights deal directly with film sales agents, although Yana Georgieva, head of sales at Bankside Films (and herself Bulgarian), said that even that carve-out involves “so many fights with Russian buyers” and still usually results in Balkan states having non-exclusive SVOD and TV rights (which are shared with Russian distributors).
In 2016, the British Council even sent a delegation of sales agents to Kyiv to meet distributors from CIS countries in the hope of engendering more deals independent of Russia. “But personally, even if I really wanted to, I couldn’t do any deals,” says Georgieva. “And the reason was that [Ukrainian distributors] just can’t offer enough in order to be competitive.”
For the moment, Film Export U.K.’s Bloye says it’s not possible to predict what the current situation will mean for the carve up of rights in the future.
However, he points out that, traditionally, it is very hard for smaller countries to prise rights away from a larger neighbor because “it’s always a bit nerve racking to sell a smaller territory first if you’re going to sell the big territory, then you’ve probably lumped it in with all the territories because there are economies of scale for the buyer from the big territory.”
When it comes to film sales, that model tends to persevere despite politics.
Bloye points to former Yugoslavia as an example of a territory that, despite its involvement in a bitter and deadly war that resulted in the creation of six separate countries, including Croatia, Slovenia and Serbia, still sees single distributors snap up rights for the entire region. Similarly, despite previous animosity, rights for the Republic of Ireland are usually sold along with those for the United Kingdom (which comprises England, Wales, Scotland and Northern Ireland).
In the future, even if Ukraine manages to extricate itself from Russian distribution deals, it’s likely the country would still find itself bundled up as part of a consortium with other Eastern European territories. “It’s really a question of who’s prepared to come up with the money,” Bloye explains, adding that usually it’s the biggest country in the region.
When it comes to the business of selling films, “there’s no standard template in the film industry,” says Bloye. “Which makes it simultaneously exciting and infuriating.”