“It’s an opportunistic time”: FilmNation, AGC, UTA heads assess indie landscape

The mood is buoyant heading into Cannes Film Festival after a positive EFM in Berlin and the end of the writers and actors strikes. An industry-wide contraction has focused minds and, while streamers are not as prolific buyers as they were, and corporate uncertainty hovers over Paramount and Warner Bros Discovery, there are opportunities for the independent sector.

As they prepared to head to Cannes, leading sales agents Glen Basner, CEO of FilmNation, Stuart Ford, chairman and CEO of AGC Studios, and Rena Ronson, partner and head of UTA Independent Film Group, sat down with Screen International to discuss their businesses and the independent landscape.

Give us a snapshot of your companies after the strikes and production delays.

Glen Basner: It feels like it’s normalising, but there’s still some talent scheduling to work out. We’re in post on [Mike Flanagan’s] The Life Of Chuck, [Edward Berger’s] Conclave, [Cannes Competition selection] Anora from Sean Baker, Maria for Pablo Larrain and a TV series we’re doing with Sky and Playground in the UK called Small Town, Big Story. So we were able to remain active and we just started production in Cape Town on Novocaine [from co-

directors Robert Olsen and Dan Berk for FilmNation’s Infrared label] that we sold to Paramount for the world, which Rena helped sell.

Stuart Ford: We have nine features we produced, or produced and financed, releasing this year. We managed to either get productions away before the strike or get interim agreements during the strike. We have Ron Howard’s Eden and Justin Kurzel’s The Order both in post. On the TV side, our $160m Roland Emmerich epic show Those About To Die is in post and airs on Peacock in July. We’re also finishing up a show we do for Amazon called Troppo.

And 2024 has begun well. We’ve begun shooting Giant in the UK with Pierce Brosnan, which Sylvester Stallone is producing with us, and we have a lot of things teed up to start production between now and the end of the year. Late Night With The Devil, which my shareholder Image Nation financed, sold well internationally and is going to gross $10m-plus in the US through IFC Films. And we’re relishing the fact we’re making a $90m Will Smith film [Sugar Bandits] independently in the fall.

Rena Ronson: Post-strike we sold Novocaine and we’re working with Stuart on The Order. We got an interim agreement for The Assessment with Alicia Vikander, Elizabeth Olsen and Himesh Patel, and are in post on The Thing With Feathers starring Benedict Cumberbatch. We also worked on smaller films that got interim agreements quickly. A lot of documentaries like Will & Harper got made during strike time, and there was 2024 Sundance entry Didi, and East Of Wall from newcomer Kate Beecroft, which shot in South Dakota — all shot during the strike.

Was the independent space able to benefit from that period late last year when SAG-AFTRA talent could not shoot or promote film and TV for studios and streamers?

Ronson: Maybe there were some more opportunities, but there were also people who didn’t want to shoot movies during a strike, regardless of an interim agreement.

Basner: It was a bit easier on the talent availability side, particularly cast. I wouldn’t say that all of a sudden movies we didn’t think we’d ever shoot raced into production, because that’s not a great way to make a movie. But on movies like The Life Of Chuck some cast came in later and that was very exciting, like Chiwetel Ejiofor. Pablo Larrain was able to make Maria with Angelina Jolie.

Ford: I’d agree with Glen. The upside from a casting perspective was incremental rather than transformational. Ron Howard assembled an amazing cast on Eden with Jude Law, Ana de Armas, Sydney Sweeney, Vanessa Kirby and Daniel Brühl, and a few of those names fell into place late in the day.

Stuart, Screen reported that Giant, your Naseem Hamed boxing drama, relocated to the UK to benefit from the UK’s new Independent Film Tax Credit. How did that play out and are you looking to shoot more in the UK now?

Ford: That was originally slated to start shooting about nine months ago. It stalled because some of the soft money from Screen Yorkshire fell out very late in the day. Then the strike hit and we had to press pause again because of talent unavailability. Post-strike we were able to get the film back on track. To compensate for losing the Screen Yorkshire money, we shot the interiors in Malta, which is cheaper below the line than the UK. But after the announcement of the enhanced UK tax credit, we rebooted the UK production plan at great speed because on a 1990s period drama like Giant, the quality and authenticity of British production design can’t be beaten. Shooting on the entirety of the film is now underway in the UK.

Glen, what are your thoughts on the new UK incentive, and which other shooting locations are attractive?

Basner: We’ve always liked to shoot in the UK because it’s got such a great talent base in front of and behind the camera, and there’s always been a fairly good tax incentive. This new tax incentive is fantastic and will continue to motivate us to make films there.

We shoot all over the world. You’re always trying to balance out the efficiency of how you’re financing the movie with tax incentives with what makes the most sense creatively. We’re shooting Novocaine in South Africa and we’re having a great experience there. South Africa doesn’t necessarily offer the greatest tax incentive, but the cost base is quite reasonable so it’s turned out to be the perfect situation.

Ronson: When we’re putting movies together, we look at those tax incentives — it does matter. But what Glen said is 100% correct: we’re not just going to shoot, say, in Bulgaria because it’s cheaper if it doesn’t make sense for the film or the filmmaker’s vision. We are looking at the UK on a particular film that we wouldn’t have been able to look at before, so [the UK Independent Film Tax Credit] is incentivising us to look at opportunities there.

Germany offers good tax incentives and regional funds; they’ve got quite a great set-up that can get you close to sometimes 40-50%… We consider all of that when we’re going to equity. I had a meeting recently with some executives from Prague and Budapest and it was interesting to learn there are no fringes or union costs if shooting there.

What are you hearing from buyers heading into Cannes?

Ronson: We are hopeful everyone is always looking [to buy]. Nobody stops and says, “We’re done.” Last year a couple of studios were packed for 2023 and 2024 and so they didn’t have room, but it feels like we’re going towards a more active market for buyers who might be looking at 2025. The strike slowed things down and films got pushed, but the buyers are ready and eager.

Ford: Berlin was a very robust market. There was a lot of optimism and buoyancy and a lot of buying activity. We’re hearing a lot of the international buyers see a little more breathing room in the exhibition sector for themselves in 2024 because of the thinned-out studio slates.

The international independents still have a challenge similar to the US independents, which is the appetite of the streamers to make pay-1 deals on their theatrical releases. Those licence fees have shrunk in recent years and put pressure on the buying capacity and appetite of independents. It’s too early to know whether those pay-1 licence fees are starting to go up, maybe because the streamers are putting less of their own self-financed productions into play. That’s the hope and maybe we’ll get more intel in Cannes.

Rena and Glen, does that chime with what you’re hearing?

Ronson: Certainly on the domestic side, there is a little bit of renewed interest on the licensing side, which can help some of the smaller US theatrical distribution companies.

Basner: I agree that Berlin started off the year in a positive and robust way. The ability of an independent international buyer to sell their pay-TV rights and the activity level of the streamers in any given territory have real impact on whether a theatrical distributor is going to come buy and pre-buy movies from us.

Another point is that the contraction in the marketplace last year was a bigger story than the strikes in our world. People understand what that contraction means in their territories in terms of what works theatrically and they have a clear sense strategically of what types of movies they’re looking to pre-buy. That makes people feel confident that when they respond to material they can step up.

What are confidence levels like among US buyers?

Ford: This is a fundamental issue in our business right now. The US theatrical distributors, in particular the independents, still lack confidence in what can work and what cannot work and it makes them cautious. In terms of how independents can compete with streamers, I’m constantly preaching to our friends at these companies that you have to back your judgment and come in earlier as a pre-buy or based on footage, the way the big overseas independents do. If you wait for finished product, you will nearly always lose out in a competitive bidding situation to streamers, who don’t have to factor P&A spend into their P&L on a movie.

Whether it’s because of more breathing room in the marketplace vis-a-vis the major studios or because the awards films this year were universally lauded, hopefully some confidence will creep back into the marketplace. We need more companies having the verve that A24 showed in opening Civil War as aggressively as they did to get back to a vibrant US buying landscape.

Basner: Rena, I’m wondering if you agree with this. One of the challenges I’m feeling with US independent distributors is their pay deals are almost too good on the downside: the floors on their deals are so high and tied to P&A that they’re not necessarily incentivised to take risks and break movies out because they can take very limited risk, not do so much box office, but still turn a decent profit. It’s changed the paradigm from how it used to be maybe a decade ago where they needed to have that theatrical success to create the value to be able to deliver it to their pay partners. It feels inverted and limiting.

Ronson: Yes, that’s why you don’t see as many small theatrical releases getting enough time to build their audience; they’re wide releases that trigger their output deals. If we don’t have a healthy theatrical marketplace in the US, the independent sector is going to be very problematic, and then we’re relying on deals that just go to streamers or get released on a certain number of screens that trigger a pay-1 window.

So having said all that, are US deals still as meaningful as they used to be as a driver of international sales?

Ford: A US deal with a substantial theatrical component, which has become even more of a rarity now, certainly on a pre-sale basis, can be a very powerful driver. Do foreign buyers need it? No. So it’s a question of pricing.

We’ve seen the bigger international distributors are still willing to release films theatrically, even if they’re going to streaming in the US. Likewise the US streamers have evolved their perspective and are allowing overseas distributors either to release a movie theatrically ahead of it going to the platform in the US, or simultaneously on some kind of basis.

Two movies we sold very well internationally, Hit Man and Woman Of The Hour, are both out on Net­flix this year and both will have some limited theatrical in the US. But the real bonus for the international buyers is that they have a window to launch a robust theatrical release ahead of it going to platform.

Ronson: That international buyers are now okay with a streaming deal in the US as long as their windows are protected is a positive change.

Basner: International independent distributors and sellers like ourselves are all incentivised to ask: why would one territory rely on any other territory for their success? Traditionally it’s been very important and a lot of that has been driven by exhibition. But over the past four or five years we’ve started to move away from that, so we don’t need to have US theatrical in place to pre-sell a movie. I would argue that it’s to the benefit of our independent customers around the world to jump in without it, because it means that they’ll be able to secure their territorial rights before maybe we would enter into a global deal.

The other part of it is changing release strategies. Stuart laid it out with regard to streamers. That’s a big change and everybody could win in that scenario. But another part of it is this idea that everyone’s held back to the US. For certain movies it may make sense, but on plenty of movies it no longer needs to be; even the studios are releasing around the world well before they release in the US. Our British movie One Life, as an example, was released first in Italy and it released almost last in the US. That movie made $45m at the box office before the US even released.

Expensive packages can be prohibitive for some international buyers. How do you bring sufficient supply to their pipelines?

Basner: I don’t believe this has been reported on accurately and I can’t speak for every company because I’m not tracking every company. But I’m pretty sure 75% or more of our movies every year have gone to independents. There are some huge deals that end up going in a worldwide deal [to a studio or streamer] and those get reported on because it’s a sexy story. It’s never really changed for us. We’ve built our company on our relationships around the world and we’re set up and incentivised to support that community, just as we’re motivated to support studios and streamers.

Ford: The marketplace has evolved and a higher proportion of the films coming to market have that clear-eyed thinking about where their final home will be. The competitive buying landscape continues to evolve and it’s my sense that while the global streamers still buy plenty of movies and have an appetite for premium packages, they’re not buying with the same voraciousness as maybe a few years ago.

Stuart and Rena, what proportion of your sales titles end up at streamers?

Ford: In scripted television, it’s probably 50/50. In feature film, over the five or six years since we launched AGC the only movies we’ve pre-sold to streamers on a worldwide basis were not features that the international marketplace was going to have any great appetite for. We’ve remained very loyal to the international independents where we can.

On movies that were pre-sold internationally, we’ve licensed the US rights to a streamer in about 50% of cases. I would like to see US theatrical buyers be more confident and competitive with streamers for the best finished product. It was very telling how many of those US distributors, including major studios, worried themselves out of a deal on Richard Linklater and Glen Powell’s Hit Man in Toronto when the reaction from Venice and Toronto had “audience and critical smash hit” written all over it. The box-office success of Glen’s next movie Anyone But You [Sony’s romantic comedy has earned $219m worldwide] shone even more of a light on the Hit Man overcaution.

Ronson: From a selling perspective, looking at the past five years it’s probably been equal. The financial opportunities and the ability to reach a massive audience can be one reason to take a streaming deal. But there are very specific reasons why we sell one way or another, and it’s never a decision we make alone.

We hear major European territories remain aggressive, but which regions are challenging?

Basner: Southeast Asia feels like a region that hasn’t quite recovered from Covid like the rest of the world. So we’re focused on trying to understand better how to service, how to evaluate and how to support moving back into growth mode.

Ford: It’s the same [for us]. We have also seen a contraction in the pan-regional pay-TV marketplace across Southeast Asia, which was a valuable revenue stream on independent films.

Based on the slimmer release calendar this year, it’s been estimated box office may decline year on year by around 10% in North America and 5% globally. Does this present an opportunity for independently financed films?

Ford: We’re absolutely taking that approach in our US buyer discussions on a few of our films. If not this year, then when?

Basner: I agree, with the caveat it still has to be a compelling proposition.

Ronson: It’s an opportunistic time. There are financiers out there who want to support the independent community, but we need US distributors to come up with innovative solutions to get people into theatres.

AFM has moved to Las Vegas. Are you on board?

Ford: I was fairly vocal with IFTA and my peers that it was a bad idea. I still think it’s a very bad idea long-term but I have been persuaded, not least by Glen, that for one year, as an interim measure while AFM reboots its Santa Monica or Los Angeles presence, it’s not the worst thing in the world and might even be a refreshing change. We’re definitely going to attend. It’s essential to the long-term viability of AFM that it’s based in Los Angeles and that when the international buyers come to do business there is connectivity between AFM and the Hollywood ecosystem.

Basner: The idea that we would pivot quickly [from Santa Monica] and have some fun with AFM in Vegas, so long as the eye is on coming back to a better home in Los Angeles, is the way to go.

Will you take offices on site at The Palms Casino Resort, where the market will take place?

Basner: Yes.

Ford: We may as well jump in with both feet — embrace the whole thing.

Closing thoughts?

Basner: We read a lot about the doom and gloom in our business and last year was challenging, but I don’t feel it. I feel back to work. I feel excited. I feel challenged creatively. There were so many great films at the Oscars. Last year was a banner year and that should lift all our spirits.

Ford: We’re embracing the moment in 2024 amid the undeniable challenges in the industry. It’s a cliché but that does bring opportunity and innovation.

• Optimistic US sellers anticipate strong Cannes business from Europe and Asia