By NANCY TARTAGLIONE, International Editor | Saturday, 31 December 2011 10:24 UK
Although the financial crisis worsened in Europe this year, a bright
spot emerging is the region’s film financing. I’m told that European
investors who have become increasingly skittish about putting money into
the markets are more seriously eyeing film investment as a safer bet.
At the same time, producers and studios want to let outsiders in to
mitigate risk.
In recent high-profile deals,
France’s StudioCanal which is riding high with
Tinker Tailor Soldier Spy
among other projects has signed a $200 million slate financing pact
with London-based private fund Anton Capital Entertanment. But on a down
note for France, the end of the year has been marked by upset in the
post-production sector with the financial turmoil at Tarak Ben Ammar’s
Quinta Industries and the future of dozens of films in jeopardy. The
next year will see much hand-wringing over a sector that has moved to
digital at a breakneck – some would say reckless – pace. Buyers were in
fine fettle at the Cannes Film Festival with many deals concluded and a
sense that smart money and realistic prices have returned. I’d be remiss
if I didn’t mention Cannes’ persona non grata Lars von Trier and his
controversial “Nazi” remarks. On the opposite end of the spectrum,
Cannes this year saw the debut of such award darlings as
The Artist and Palme d’Or winner Terrence Malick’s
The Tree Of Life.
Cannes programmer Thierry Frémaux in 2012 faces the daunting challenge
of coming up with a better selection than his 2011 vintage which found
favor with the typically harsh Riviera audience.
In
Germany in December, the oft-morphing Senator
entered a long-term strategic partnership with Ryan Kavanaugh’s
Relativity which also took a significant stake in
the producer-distributor. In other German news, there were troubles at
Degeto, the film acquisition arm of broadcaster ARD whose chief,
Hans-Wolfgang Jurgan, was let go in November following revelations that
the company had overspent its budget. German independent producers were
particularly anguished given Degeto’s position as a prime co-production
partner. The situation remains somewhat tenuous and will likely be a hot
topic at the Berlin Film Fest in February.
India‘s Reliance, which rode into Hollywood a
few years ago to back DreamWorks as well as a host of star shingles,
confirmed in May that it would fund David Linde’s production and finance
company Lava Bear. Back at home, mogul Anil Ambani’s Reliance
MediaWorks, which includes movie theaters and TV production among its
businesses, announced plans to raise $111 million in a rights equity
issue. The group also launched phase 1 of its RMW studios,
a Hollywood-compliant facility in Mumbai that became partly operational
in January. Ambani’s brother Mukesh is also reportedly looking to get
into the entertainment biz. It’s understood the Reliance Industries
chairman, who is India’s wealthiest man, is in talks to acquire a
minority stake in TV and Internet group Network18. In other news, Tata
Elxsi, the technology arm of Indian conglomerate Tata, recently formed a
joint-venture with LA-based A Squared Entertainment to create, develop
and distribute original animated entertainment and digital gaming.
Meanwhile, India has welcomed such high-profile shoots as the latest
Mission: Impossible – Ghost Protocol and
The Dark Knight Rises while local indies like
Delhi Belly
have been shaking up the box office. The prolific industry is expected
to continue to grow with smaller films having a shot at finding
audiences, although export remains a challenge for the future.
Japan suffered a catastrophic earthquake in March
that set off a horrific tsunami leaving more than 15,000 dead in its
wake. A handful of films, including Clint Eastwood’s
Hereafter – which depicted similar
events - were pulled from cinemas amid concerns of their
inappropriateness. The events also triggered a fear of tape and digital
memory shortages in Hollywood especially as Sony was led to stop
production at several of its factories. As a result of the devastation
and a hacking scandal that saw over 100 million PlayStation accounts
compromised, Sony said it expected to post a $1.2 billion net loss for
the fiscal year ending March 2012. Around the same time as the disaster,
Kazuo Hirai saw his duties expanded to oversee all of Sony’s
consumer electronics businesses along with other functions in what is
believed to be an important step on his way to succeeding CEO Howard
Stringer. Japan’s box office suffered heavily, although a well-attended
Tokyo International Film Festival this fall provided some solace as the
industry continues to recover.
China has been a hot bed of activity with A-list
stars and U.S. production companies getting in on the action. Christian
Bale this year famously starred in Chinese master Zhang Yimou’s
The Flowers Of War while Keanu Reeves is directing his feature debut,
Man Of Tai Chi,
with coin from Village Roadshow Asia and China Film Group. Also in
2011, Thomas Tull formed Legendary East in Hong Kong to produce one to
two event-style films for worldwide audiences per year and in August it
was announced that Paul Y Engineering Group would invest in the venture
taking a $220.5 million 50% stake. On December 30th, however, it emerged
that PYE was unable to raise the necessary funds in a share sale and
put its investment on hold. PYE said options to modify the
deal structure could be discussed in 2012 while Legendary East said a
placing exercise was being targeted for a relaunch next year. Also in
August, Relativity along with Huaxia Film Distribution and Beijing’s
SkyLand Film-Television Culture Development Ltd created a strategic
partnership to form China/US distribution entity Sky Land
Entertainment. The first film under the deal, Jon Lucas and Scott
Moore’s
21 And Over, caught flack in October for filming in a
province of China where a blind activist has been held under brutal
house arrest. In December Celestial Pictures Limited, Saban Capital
Group and Lionsgate created Celestial Tiger Entertainment,
an independent Asian media company focused on branded pay TV channels,
content creation and distribution across Asia. DreamWorks Animation was
also reportedly eyeing a China outpost with plans to build a studio in
Shanghai.
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