Yachts Land at Cannes Festival With Fewer Film Buyers

(Bloomberg) -- The Cannes Film Festival opening today looks less like “The Great Gatsby” and more like “Risky Business” as 4,000 independent movies vie for the attention of a shrinking cast of distributors.

Advance bookings suggest attendance at the world’s largest film festival will be down about 15 percent, complicating moviemakers’ efforts to find distributors. The number of films at Cannes, known for celebrity sightings and yacht parties, is roughly the same as a year ago, organizers say.

The number of films reflects production financing available in previous years. Now, a lack of capital is squeezing everyone from distributors like those looking to buy movies at Cannes to filmmakers including Steven Spielberg, who is trying to raise money for his newly independent DreamWorks studio.

“It’s very tough out there,” said Jerome Paillard, director of the Cannes Marche du Film, the independent film market that runs parallel to the festival. “The credit crunch is really a problem for distributors with no strong cash flow and who rely on credit lines to buy films.”

Time Warner Inc. said last month it had to absorb $120 million in costs because film finance partner Village Roadshow Pictures couldn’t obtain funds. Village Roadshow said this week it restructured a bank credit line, freeing money to cover its share of 2008 productions. In February, Lions Gate Entertainment Corp. said Pride Pictures LLC won’t participate in three films.

Heath Ledger Film

This year’s screenings include the late Heath Ledger’s final film, “The Imaginarium of Doctor Parnassus,” directed by Terry Gilliam, and Ken Loach’s “Looking for Eric,” which stars soccer legend Eric Cantona. Filmmakers Quentin Tarantino, Ang Lee and Pedro Almodovar are showing works.

Movies with early buzz include Jane Campion’s “Bright Star,” about the romance between 19th century poet John Keats and Fanny Brawne, said Michael Schaefer, senior vice president of acquisitions at Summit Entertainment, an independent producer and distributor based in Santa Monica, California.

The festival begins with “Up,” the 3-D feature from Walt Disney Co.’s Pixar, the first animated film to open Cannes.

With less money in the pockets of distributors, producers have lowered their budgets. The cost to make the average movie in the Marche du Film has declined about 20 percent to $5.2 million this year, Paillard said.

The falling costs also reflect the glut of movies now coming to market, said Stephen Margolis, the head of Future Films, a financier and producer based in London.

“Some films will not see the light of day,” Margolis said. “Banks are beginning to leave the sector.”

Film Budgets

Not everyone is coming with less money.

Revolver Entertainment, a London-based distributor, is holding its acquisition budget steady this year, said Managing Director Justin Marciano. The company has released movies including “Tell No One,” the French film featuring Francois Cluzet and Kristin Scott-Thomas, and Charlie Kaufman’s “Synecdoche, New York.”

“There will be some good films that don’t make it and from our buying perspective at the moment, the state of the economy obviously has an impact,” Marciano said. “It’s super tough for producers at the moment and there will be fewer films made.”

The backlog of movies “hurts the marketplace,” said Michael Cerenzie of Cerenzie-Peters Productions, an independent producer in Los Angeles. “We’re still another year away from getting through this saturation.”

Cerenzie’s production credits include “Before the Devil Knows You’re Dead,” starring Philip Seymour Hoffman, and “Den of Lions.”

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