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HomeHollywood NewsBerlin: International Buyers Up in Arms Over Buy-Back Proposals Post-'Coda' (Exclusive)

Berlin: International Buyers Up in Arms Over Buy-Back Proposals Post-‘Coda’ (Exclusive)

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With streamers paying big for global rights to films already sold to overseas buyers – see Apple’s $ 25 million deal for the Sundays hit ‘Coda‘ – international distributors are worried that sales companies will inevitably ‘ Kill fees’ to force them to sell back.
As Berlin’s European film market closes on Monday, international distributors are taking up arms over an alleged proposal to introduce mandatory “buy-back” clauses for films pre-sold in foreign territories.

The idea, which many sources say has been floated by American talent agencies, would have to promise international distributors to sell a film they bought for a small “kill fee” once the film was made. Want to get a great price from one global buyer, such as a streamer or major studio.

Several major independent buyers told the Hollywood Reporter that the proposals would kill the “pre-sale” model of independent film financing and, ultimately, the independent industry as a whole.

“If we start accepting the idea [of mandatory buy-back clauses] then we’ll go out of business. It would mean taking all the risk on the flop and capping our upside on the hit.
“It would be fatal, not only for international buyers but also for sales agents and also for talent agents, for the middle-to-long term,” says Ricardo Kostianowski of Sun Distribution, a leading film distributor of Sun Distribution . ”

Philip Nekbul, CEO of UK distributor Curzon, noted that his company “invests in a slate of in-the-in-knowledge, which will probably surpass only a small number of titles and pay for those films Will help those who unfortunately lose money. ” These successful films that provide the platform for our business. A model shared by local distributors around the world. “

A mandatory buy-back clause, Neckbull said, would result in a full range of filmmaking, distribution, and exhibition if a third-party and cherry-pick could come to the movies if the film proved to have commercial value. ”

This is not a theoretical issue. The biggest deal out of Sundance this year — Apple Studios’ $ 25 million worldwide acquisition of Cyan Herder’s crowded Koda – has been complicated by the fact that French sales organization Pathe (Coda 2014’s French Dickie La Famille Is a former remake of Belair) film for most of the world before it hits Park City.

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Koda’s reported $ 10 million budget came in Latin America, such as Italian distributor Eagle, Gaga of Japan, and Sun Distribution, who agreed to buy the film for their respective territories, legal commitments, to producers, which reported to Coda about $ 6 million. Used to allow collateral to secure. A bank loan is required to make the film. Many of these buyers were blinded by the Apple deal, which they first heard from reports in the trade press.

Netflix faced a similar situation when it finalized a deal for the awards of Aaron Sorkin, The Trial of the Chicago 7. The drama of the 60s-Star Baron Cohen and Eddie Redmayne -Streaming Before the Giants were sold in most parts of the world. Stepped in to snatch the finished film.

Netflix was able to secure the film worldwide by paying only what some buyers call an “incredibly high premium” for pre-sold international rights. However, several international distributors who bought Koda have told The Hollywood Reporter that they do not intend to give the film back, a decision that could jeopardize the Apple deal.

An international distributor told THR, “We have been asked, but we like the film a lot and have already sold it to our home entertainment and our TV partners.” “We intend to release it as planned in our region, as we have signed the contract.”

An international buyer, who was not the former, said: “a lot of distributors who bought Chicago 7 agreed to sell it in favor of CAA [the agency involved in the Netflix deal], but with Koda, they were digging.” ” Buy either film, told THR.

Unheard of dozens of international distribution deals can be a messy, and costly, process. In the past, this was rarely necessary. The international pre-sale model was predicted by the idea of ​​acquiring financing outside of which, once expired, could be sold to domestic distributors. It was a win-win: producers financed their films, international distributors funded the U.S.

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Films (often considered a less risky investment than local productions) for release in their home regions, and sales agents and talent agencies received their cuts. But the rise of streamers complicates things. Netflix, Amazon Prime, Apple, and co. They want a film to have deep pockets to pay above the market price. But, unlike most American indie distributors, they typically demand global rights to deliver films to their customers worldwide.

A veteran international buyer said, “Streamers are offering a big pot of gold right now and everyone wants a share of it.” “But you can’t sell an already sold movie.”

According to international distributors, it is being proposed by some agencies. That is, all new pre-sale contracts should include a mandatory “buy-back” clause, fixing a small “kill fee” – about 10-15% of the total value of the original deal – to decide to snag a streamer or studio. Should be the worldwide authority after the film is made.

“It’s a con — you’re already selling a sold-out film, it’s not yours,” says Stefano Masenzi, head of the acquisition of Italian distributor Lucky Red. “And then you want to have a clause in your contract to make it legal, basically asking your buyer to be a partner in your con.”

Global buyers saw the offer as a “non-starter”, according to a letter written by dozens of international buyers on February 12, 2021, viewed by the Hollywood Reporter — but never sent, due to concerns that the competition Any coordinated action by distributors. Can be seen as collusion.

It is a well-known fact that independent, international distributors are a linchpin for acquiring independent films, enabling talent agencies and sales agencies to earn their fees, “the letter reads.” When foreign buyers of a film Committed to, usually at the stage of the script, they take substantial risks, uncertain of the outcome. As such, they also need to get the full benefit of the said risk. “

“Incredible short-sightedness” is what Olivier van den Broeck, managing partner of The Searchers, a leading indie distributor in the Benelux area, calls the suggestion for a mandatory buy-back clause.

“I am concerned that this idea is starting to get in the minds of not only some talent and international sales agents but also in the minds of some financiers,” van den Broeck told THR. “Now there is no international sales business without agencies, but no international trade, a period without foreign buyers.”

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David Garrett, global sales group CEO Mr. Smith Entertainment and veteran film scene giants, acknowledges that individual distributors may agree to “buy-back” deals in favor of sales companies or agencies, but this is an industry-wide Introduces the contract. In pre-sale deals, the -back “clause” would be completely disqualified and kill the independent distribution business for good. We will be biting the hand that feeds us. CAA, Pathé, and ICM were not initially available for comment.

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