The studios have always acquired independent films for international territories but several have recently stepped up their activities. John Hazelton finds out why and looks at the response from sellers and indie buyers.

The big projects were the ones that were most in demand at last month’s Cannes market, and big projects need big buyers.

No surprise, then, that the international acquisition divisions of the Hollywood studios ― companies for which size and scope matter very much ― were involved in some of the market’s more notable deals.

Universal bought Arclight’s Mental and Relativity’s Immortals for bundles of territories, Sony took a package of international rights on Focus Features’ Hanna, and Warner picked up Morgan Creek’s Dream House for a parcel of markets.

The studios’ acquisition divisions are certainly not a new presence on the international industry landscape. At different times and in various guises, the majors have been making forays into the independent international marketplace for the past 20 years.

Some of the current executives and set-ups ― Fox Searchlight’s Tony Safford, for example, and the Sony Pictures Worldwide Acquisitions Group ― have been consistently active for a number of years.

Recently, however, several studios have been gearing up for what could be a more aggressive push into the independent business.

Paramount formed its Worldwide Acquisitions Group, led by Matt Brodlie, in the summer of 2008. And since the start of 2010, Universal has promoted UK-based Christian Grass to president of international productions and acquisitions for Universal Pictures International and Warner has installed former New Line International Releasing president Camela Galano in the new post of president of Warner Bros International Film Acquisitions.

Disney, meanwhile, recently named long-time executive Jason Reed as head of Walt Disney Studios International Productions, though it is not yet clear whether Reed will be acquiring for international territories as well as producing in them.

Several factors may be spurring the studio push: a focus by some studios on fewer but bigger in-house productions, resulting in less product to feed through already established global distribution pipelines; increasing use of co-financiers who may retain rights for certain markets; and the need to feed lucrative free and pay-TV output deals in markets such as the UK and Latin America.

Topping up the slate

“We have quite a full slate,” says Galano of Warner, noting that as well as its own in-house projects the studio also releases films from its New Line label and several outside producers. “But sometimes we don’t have a film or two for international, or maybe we have a film for selected territories, so we do have capacity.”

Acquisition can also, she adds, top up Warner’s release slate in a certain market when the studio’s local production operation in that market is having a less productive year.

Galano, who also bought German rights to Nu Image’s Conan at Cannes and is negotiating for several major territories on Inferno’s The Lost City Of Z, says she is looking for one or two “studio-level” ― though not necessarily studio budget ― commercial genre films a year for major territories. Jim Sheridan thriller Dream House, which Warner bought for the UK, France, Spain, Australia/New Zealand and Latin America, fitted the bill because “we didn’t have anything along those lines for next year”.

The longer-established studio acquisition divisions may not be dramatically increasing their shopping activities but some do appear to be steadily building on their experience in the marketplace.

“We’re doing less acquiring for limited territories,” says Steve Bersch, president of Sony Pictures Worldwide Acquisitions Group, whose previous buys have included QED’s District 9, several territories on Summit’s The Book Of Eli and most international rights on Hyde Park’s Machete.

“In the past we might take a film for several territories. Now we’re looking for a substantial footprint so we can put the muscle and the reach of a studio behind the release.”

Bersch ― who says his division still buys opportunistically since its parent studio has not cut down on in-house production ― looks for two to four “high-quality film-maker-driven” pictures a year, “in commercial genres, with good casts and good scripts”.

To get such films, of course, a studio has to compete with independent ­distributors looking for much the same mix of elements. Studio buyers acknowledge that healthy independents can certainly compete with them in some regards. But they also point to the advantages to be gained from studio distribution.

Bersch, for one, suggests that sales companies have recently begun to look more favourably on deals with studio buyers. “There are a lot of benefits to selling to a studio,” he argues. “Doing a studio deal gives you a better shot at a back end because of the strength of the studio, the efficiencies of combined ­marketing and the benefits of a co-ordinated release plan.”

Weighing the pros of selling to a studio against the cons is what sales ­companies are having to do as studios compete with independent distributors for some of the highest-profile projects in the market.

Distribution clout is indisputably a significant pro. Morgan Creek president of sales and distribution Daniel Diamond confirms that part of the attraction of his deal with Warner on Dream House was working with “a very engaged buyer that has outstanding distribution capabilities. Its theatrical infrastructure, its TV deals, its force on the racks ― virtual and actual ― in home entertainment is superb.”

Financial stability is another pro. For a seller trying to finance a project by borrowing against foreign sales contracts, “any deal with a studio is totally bankable”, points out Summit International president David Garrett, who besides dealing with Sony on The Book Of Eli has sold several territories to Universal on each of Summit’s three Step Up films.

In some studio deals, in fact, it may be the lending banks that are pushing ­sellers to deal with ­studio divisions rather than less creditworthy ― in the banks’ eyes anyway ― independent distributors.

The cons of studio deals include the danger of a film being overshadowed by the studio’s in-house blockbusters. An independent film may do better as an independent distributor’s big release of the year than as filler in a studio’s release schedule.

However the main advantage, at least to studio deals for multiple territories, appears to be cross-collateralisation. In other words, buyers can offset a loss suffered in one territory against a profit made ― and hence overages due to the seller ― in another.


Cross-collateralisation is considered standard practice in multi-territory deals and is accepted by most sellers.

“If they’re buying a few territories then it’s fair,” says Nu Image partner Danny Dimbort.

Still, while studios can sometimes be persuaded to limit cross-collateralisation to only certain territories in a multi-territory deal, the practice can limit a producer’s or sales company’s back end from international distribution, especially after notoriously ‘creative’ studio accountants have done their work.

If studio acquisitions divisions have their pros and cons for sellers, for independent buyers in the international marketplace they would seem to represent a threat. Buyers reps, however, insist that their clients can compete with studios on several levels.

Independents, their reps say, can pay as much as, if not more than, studios for top-level theatrical projects. They can move faster because they do not have cumbersome decision-making hierarchies like the studios. And, claim the reps, independents can be relied on to report thoroughly and accurately on a film’s performance.

Beyond that, reps suggest, sellers should recognise the loyalty of the independent clients who helped create the international marketplace for independent films.

“It’s all up to the sales companies,” says Julie Kroll, whose Los Angeles-based Summerland Entertainment represents independent distributors from a number of territories. “If they really want to put us out of business, it’ll happen. But something tells me everything will be fine at the end of the day because everybody knows where they started and who helped them.”