![]() That didn’t happen, and nervous producers and financiers are hoping - but not expecting - a rebound at Cannes next month. After a rocky end of 2007, some were expecting a foreign-sales rebound in Berlin. “SKE made exactly the kinds of movies that other companies make,” said one film-financing insider, “and that the foreign market says it doesn’t want.” While some tried to write off the company as an anomaly because Kimmel himself made his money outside Hollywood, in the apparel industry, the scaling back could bode darker times. Meanwhile, newer entities like Media Rights Capital (“Babel”) earn high marks from insiders.īut the news that Sidney Kimmel Entertainment, producer of such films as “Charlie Bartlett” and “The Kite Runner,” will reduce its operations has been one sign that the market could get worse. Once a budget increases beyond $10 million - in a “more money, less risk” paradox - it gets easier.įor these and other pics, the question remains: How much of a shakeout is on its way?īig Beach (“Little Miss Sunshine”), River Road (“Into the Wild”) and politically conscious Participant (“An Inconvenient Truth”) are among the steadier players in the single-picture financing game, and all have enjoyed at least one or two hits during the past few years. ![]() That’s the area in which pictures require too much money to be covered easily with state money and the odd equity investor but not enough money that they’d have sufficient upside to attract bigger equity and debt players. The dead zone for single-picture financing lies in the $3 million-$10 million budget range. At talent firm Creative Artists Agency, a Tim Robbins directorial project called “The Heretic” fell apart for reasons likely connected to financing. The Oliver Stone-Antoine Fuqua biopic about Colombian drugs baron Pablo Escobar was set to go until it became clear the financing wasn’t ready. Meanwhile, at the agencies, a number of promising packages have struggled. The producer has since sought studio backing, and while several prospects have emerged, a deal has yet to materialize. “I’ve been producing movies for a long time, and I’ve never seen that happen before,” he said. ![]() One producer who’s behind some of the bigger indie crossovers had his movie, a $5 million drama with a noted director, fall apart just as it was ready to go into preproduction. Projects across the spectrum already have been affected. If a project can’t be presold and risk limited, financial institutions such as Aramid and Newbridge Partners who provided this funding become more reluctant to lend.įor, say, a $10 million project, $5 million may come from debt financing, $3 million from equity investors and the rest from state grants and tax rebates.īut with the debt market prohibitive, equity investors tight-fisted and foreign sales languishing, film-finance pipelines are starting to close up. Producers can’t finance most pictures without selling off the distribution rights in foreign territories, and foreign presales help cover much of the debt in what’s known as Gap/Supergap financing. To top it off, a barren foreign-sales market - some call the recent Berlin market the worst in many years - is dinging the financing world. Money is either too expensive - interest rates have soared from the neighborhood of 10% to 20% for many films - or impossible to get in the first place. ![]() Most evidently, skittish equity investors who once thought nothing of dropping a few million into a project are becoming a lot tighter with their money, while the overall number of equity investors is starting to drop.Īlmost as dramatic is the change in debt financing, the means by which much of a film’s budget is covered. “Now we’re getting a lot more.”Ī number of problems, many of which could soon be deepening, are to blame for a contraction that already is under way. “We’ve always gotten calls from producers saying, ‘Our financing has fallen through can you help us?”’ the Film Department’s Mark Gill said. ![]() Movies that are practically in preproduction are falling apart at the eleventh hour. Projects that would have sailed through easily a year ago are stalled in development. Much of the focus has in recent months been the fate of outfits such as Dune and Gun Hill, which invest in a slate of films, as Wall Street wrings its hands over their low batting averages.īut so-called single-picture financing - which encompasses films ranging from the smallest indie to a $60 million star vehicle - is going through its own turbulence. economy faces a swirl of negative forces, the film-financing world is set to endure its own perfect storm.Īnd like the economy, things could get a lot worse before they get better. NEW YORK (Hollywood Reporter) - As the U.S. ![]()
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