Co-production report reopens debate over UK tax credit
Audrey Ward in London
04 Dec 2008 06:39



A report prepared by Oxford Economics and commissioned by the UK Film Council (UKFC) has warned that the tax credit system makes co-productions unattractive to film-makers.

The report's completion coincided with an event run by the Festival of German Film earlier this week. The event focussed on strategies and business models for structuring co-productions with Germany.

Considering the timing of both events, the irony will not be lost on producers who are aware that co-productions have struggled under the current tax credit system.

The findings of the Oxford Economics report are borne out by figures from the UKFC.

Speaking to Screen, a UKFC spokesperson said "The level of UK film co-production has dropped in the last part of this year with only four films going into production spending £4.2m."

In 2007, the number of UK co-productions dropped 44% to 28 from 53 in 2006, with spend down to $144m (£73.8m) from $219m (£112m).

UK producers have to balance the benefits offered under co-production treaties against any losses they stand to make should their film fail to qualify for the tax credit. And there are questions about whether the full value of co-production treaties are being maximised.

Chris Curling of Zephyr Films is very much in favour of co-production treaties, such as the one with Morocco, which is due to come into effect next year. However he takes the view that "they are no longer as valuable as they used to be."

The research by Oxford Economics forms part of the work that the UKFC is doing to keep the Government informed about how the tax credit is working in practice. The report has now been passed to the Department of Culture, Media and Sport.

It is widely acknowledged that the tax credit system works well for UK films, set in the UK, which pass the cultural tests. Overall the level of film production in the UK has remained steady for British films thanks to the efficient working of the tax credit, public funding and the success of British filmmakers.

Rebecca O'Brien of Sixteen Films, Ken Loach's longtime producer, recognises the benefit of the new tax credit for British films. "It's a good thing and seen by us all in the industry as a good thing."

However, British producers are finding that the tax arrangements introduced in early 2007 have made it unattractive to use UK talent and crews when producing films abroad.

The effect of the legislation is such that where British crews and actors are working abroad but being paid in the UK, the tax credit will not apply.

O'Brien drew on a personal example to highlight the negative impact the tax credit system has had on co-productions. She referred to The Wind That Shakes The Barley, the film she produced before the legislation came into force.

"Under the current system we couldn't have made it. It was shot entirely in Ireland."

She also acknowledges the difficulty of keeping everyone happy. "We can't have a subsidiary that gives everybody everything."

Mike Downey, a producer with Film & Music Entertainment has found co-production work much more difficult since the introduction of the tax credit system. "We used to be able to have a very nice mixed portfolio using the former scheme. That's gone, any kind of flexibility has gone with it."

In the past year and a half, F&ME has been concentrating on in-house films rather than co-productions. "The economics don't work to do co-productions."

Downey is concerned about the volume of business that is being lost to the UK by a lack of support. He believes the tax credit system needs to be looked at again but given all the issues facing the treasury he doesn't think the Government will be too quick to resolve the problem. "We should be supported here in the UK but it's such a micro piece of legislation."

O' Brien said "There's no doubt about it, the tax credit works infinitely better but there is a blip in the system. From a producer's point of view it's a problem and it would be great to solve it."

Curling has just completed his latest film, The Last Station, which has a predominantly UK cast including James McAvoy and Helen Mirren. Initially it was intended as a UK-German co-production but because of the current tax credit system the project is now a straight German film.

Death Defying Acts, another of Curling's films, is shot entirely in the UK and is a UK-Australian co-production. "If we had been able to shoot it as a straight British film, the tax credit would have been worth £400,000," Curling said.

Curling has worked on many co-productions such as Hannibal Rising and in the past when shooting abroad, a huge part of the crew would be British.

"It used to be a huge incentive to use as many British cast and crew when filming abroad. Now there is no British reason to shoot something as a British co-production.

In response to the Oxford Economics report the UKFC spokesperson said "Film-makers understand how the tax credit works, the Treasury is paying out quickly and under the new system the money goes directly to the film so it's much more efficient. We are, of course, monitoring film outputs carefully to fully understand the consequences of the new tax credit system on the UK production environment."

David Pope, CEO of the New Producer's Alliance, is optimistic that the report will be the beginning of the hunt for a resolution. "We know we're dealing with Treasury issues and the turnaround on this requires a proportionate amount of time but we are hopeful that there will be something to address the downturn in co-productions."

What do you think? email michael.gubbins@emap.com

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Joel Silver and Studio Babelsberg Group agree five-year alliance
Martin Blaney in Berlin
03 Dec 2008 16:13




US producer Joel Silver and the Studio Babelsberg Group have agreed a strategic partnership until 2013.

The deal will include the current slate of over 15 films in Silver's Dark Castle Entertainment being distributed by Warner Bros.

A central element will be Studio Babelsberg's role as a co-producer in future films produced by Dark Castle. The agreement anticipates that a number of the films from the slate will be produced on the sound stages at Studio Babelsberg.

It is speculated that the first film to appear at the Babelsberg Studios will be in early 2009 after the Universal/Weinstein Company production of Quentin Tarantino's Inglourious Basterds vacates the lot in January 2009.

The agreement expands upon the partnership between Silver and Studio Babelsberg which has seen the Joel Silver bring V For Vendetta, Speed Racer and Ninja Assassin to the German studios over the past four years.

Commenting on the deal, Carl Woebcken, CEO of Studio Babelsberg AG, noted that the alliance would open "entirely new possibilities for the development of our own business - we get a more predictable order income for our studio operations, allowing us to create a steady work flow for our stage rental, production services, set construction and art department divisions over the next five years. In addition, we broaden our business platform, this is our first opportunity to generate co-producer profits from worldwide distribution, participating in the commercial success of Dark Castle."

Former Rogue Pictures co-president Andrew Rona has been named president of Warner Bros.-based Silver Pictures.
Joel Silver made the announcement Tuesday. The move had been anticipated for the past month, partly due to Universal's plans to close a deal to sell Rogue and its assets to Relativity by year's end (Daily Variety, Nov. 16).

Rona will also join Steve Richards as co-president of Silver's genre arm, Dark Castle Entertainment. He'll start in both slots after the first of the year.

Rona's replacing Silver Pictures president Susan Downey, who decided months ago not to renew her contract and end her 10-year run with the company.

During Rona's tenure, Rogue released "Hot Fuzz," "Balls of Fury" and "The Strangers."

Rona, who was co-head of Dimension for four years with current Paramount production prexy Brad Weston, moved three years ago to Rogue, the genre division formed by David Linde and James Schamus when they ran Focus Features.

Silver Pictures is in production on "Sherlock Holmes," directed by Guy Ritchie and starring Robert Downey Jr., and in pre-production on "The Book of Eli," starring Denzel Washington and Gary Oldman, with Albert and Allen Hughes directing.

Dark Castle's upcoming films include "Orphan," "Whiteout," "The Factory" and James McTeigue's "Ninja Assassin," which Silver's producing with Andy and Larry Wachowski.

In a surprising move, Universal Pictures announced on Friday that it no longer plans to distribute DreamWorks movies says The Hollywood Reporter.

Since Dreamworks split from Paramount on its own, the general thinking was that the former was cementing a deal with Spielberg's old Amblin Entertainment home Universal Pictures to distribute their movies.

Instead Spielberg and Stacey Snider are in advanced talks with the Walt Disney Company about a distribution deal.

Universal explained its dropping out of negotiations: "Universal Pictures has ended discussions with DreamWorks for a distribution agreement. Over the past several weeks DreamWorks has demanded material changes to previously agreed upon terms. It is clear that DreamWorks' needs and Universal's business interests are no longer in alignment. We wish them luck in their pursuit of funding and distribution of their future endeavors."

Why all the confusion? Deadline Hollywood Daily has an in-depth story explaining the situation.

The basic setup according to Nikki Finke is that Dreamworks and Universal were all set for a straight distribution deal late last year. Then the world financial crisis hit which has delayed a good portion of the bank financing Dreamworks needs to complete its big Bollywood deal with Reliance Big Entertainment.

As a result Dreamworks apparently went to Universal with demands for an investment of $250 million as well as the existing distribution setup. Universal understandably balked at the suggestion and negotiations have been dragging on for weeks, not helped by Dreamworks being unable to secure a deal with HBO to include in the package.

During this time, Dreamworks began secret simultaneous talks with Disney to see if it could offer a better deal. With its smaller slate, marketing machine, and Starz Network rollout - the studio is understandably a better fit for Dreamworks with its addition of 3-6 films per year. On Thursday Universal became aware of the Disney/Dreamworks talks and all sorts of memos seeking clarification of the current negotiations were being sent. Finally this morning Universal gave up and left the negotiating table.

A formal statement of the Disney and Dreamworks deal is expected to be announced next week.

At midpoint, sales still brisk in Berlin
Deals continue despite economic slump
By ALI JAAFAR
Icon's 'Mary and Max' picked up a number of early market sales.

'Young Victoria,' which received a warm critical response at the European Film Market, has garnered U.S. interest.

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As the European Film Market enters its second half, sellers with high-profile projects are finding there is still business to be done, even as the global credit crunch has buyers tightening their belts.
Many buyers complained about the general lack of enticing product, though some notable transactions have been completed so far.

GK Films reported brisk sales for Johnny Depp starrer “The Rum Diary” and the Keira Knightley-Colin Farrell pairing “London Boulevard.”

U.S. interest in the company’s “The Young Victoria” has been boosted by a warm critical response following its market preem. Pic, starring Emily Blunt as Blighty’s longest-serving monarch, had already screened for major buyers in the U.S. last fall without generating much traction. Its buzz-generating appearance in Berlin, though, reaffirms the Euro mart’s ability to give a pic momentum. GK Films execs now hope to close deals soon for the U.S., Latin America, Japan and Germany.

“It feels like the market is polarized,” said GK Films Intl. prexy Lisa Wilson. “There are a handful of projects out there that people want and are prepared to step up for. Everything else seems to be getting a wait-and-see attitude.”

Pathe Intl., meanwhile, has clinched major territory deals on a trio of titles.

Neil Marshall’s “Centurion,” which starts principal photography in Scotland on Feb. 22, pre-sold to Constantin in Germany, Aurum in Spain, Hopscotch in Australia, Scanbox in Scandinavia and Odeon in Greece. Pathe was also in talks to close deals for Benelux, Brazil, the Commonwealth of Independent States and South Korea.

Rolling off a buoyant two-day, E550,000 ($705,000) bow from 430 prints in France, “LOL (Laughing Out Loud),” directed by Liza Azuelos, has sold to Mediaset in Italy, Maywin for the CIS, Delphi in Germany and Alta in Spain.

Alta also picked up Mona Achache’s “The Elegance of the Hedgehog.” Cineart has taken Benelux and Video 7 Greece.

Pathe Intl. announced a sale to an undisclosed buyer for Japan on Jane Campion’s “Bright Star.” It also anticipated German deals by market close on both “Hedgehog” and Costa-Gavras’ out-of-competition Berlinale closer “Eden Is West,” as well as a pact for Spain on Stephen Frears’ competish contender “Cheri.”

Icon Entertainment Intl. scored a number of early market sales on buzz-generating Australian toon “Mary and Max,” including Gaumont for France, Switzerland and Benelux.

Rebecca Miller’s “The Secret Lives of Pippa Lee” had its Berlin preem Monday night and was attracting strong interest.

But buyers generally complained about the lack of product. Territories in Asia and Eastern Europe, specifically Russia and Japan, were cited by sellers as particularly challenging.

The sense among central European buyers at mid-market point is that business is sluggish because cash is tight.

“There’s no capital in the system, and that is affecting everything,” said one German distrib.

Others say that tight targeting of product and working with established business partners is helping them survive.

“The market is quieter than other years, but I have had quite a few meetings, and there is interest in our films,” said Marta Lamperova, managing director of sales and development of Film Europe, a division of SPI that specializes in pics from Poland, Hungary, the Czech Republic and Slovakia.

And, in a sign of the times, some people are spending their time in Berlin renegotiating deals done in the past few months.

One top Russian production and distribution shingle exec said the collapse of the TV sales market in Moscow and the plunging value of the ruble against the dollar -- down 30% in the past month -- mean minimum guarantees had to be reviewed on a raft of deals.

“We’re looking at deals on a case-by-case basis. Since we are partners, it is not just a case that people have sold us a film. There needs to be consensus,” the exec told Daily Variety. “Russia was a cash cow, but the flow has dried up, and if people want to do business in the future, they have to take account of how things are right now.”

(John Hopewell and Nick Holdsworth contributed to this story.)

Eurimages plans contribution system restructure
Geoffrey Macnab in Berlin
12 Feb 2009 06:00



A clearer picture is beginning to appear of how Eurimages (the Council of Europe fund for the co-production, distribution and exhibition of European cinematographic works) might change its contribution system.

Last month, it emerged that Holland and Italy were considering withdrawal from Eurimages on the grounds that they put more into the Fund than they get.

However, over the weekend in Berlin, at what sources have called a "constructive" and useful meeting, ideas have been floated at how the contribution system might be changed. It is currently based on a number of criteria, including GDP, population and number of co-productions.

The worry among some of the 33 members is that if some countries' contributions are reduced, others will have to pay extra to make up the shortfall.

"Some countries think the system should remain the way it is. Other countries think we should move on because the composition of the fund has changed. There are different opinions and there has been a debate," commented Roberto Olla, Executive Director of Eurimages.

After the Berlinale, Eurimages delegates will return to their countries and discuss the new proposals with their government ministries. Then, in mid-March, there will be a meeting in Paris at which a decision whether or not to change the current system.

If there are changes, the budget for 2010 will be based on the new criteria.

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Opinion: Going back to basics
Mike Goodridge in Los Angeles
20 Feb 2009 00:00



It wasn't just the critics who were gloomy at Berlin this year. Most of those attending the European Film Market (EFM) were facing some hard realities: buyers and sellers were shaking their heads trying to figure out the numbers, which no longer seemed to make sense. The mood was set when top seller Focus Features International passed on taking its traditionally grand stand at the Martin Gropius Bau, arguing that its sales focus will be in Cannes.

Only a handful of new English-language, star-driven projects were announced and of them, only the slamdunks - a Mickey Rourke action thriller directed by Walter Hill being sold by IM Global, a Jennifer Aniston romcom at Mandate - were hot-ticket items. More risky material - GK Films' three-film package of London Boulevard, The Rum Diaries and Silence, for example - was met with prudent calm. A reported $16m for the trio was the asking price for the UK, and raised buyers' eyebrows.

Then again, will Cannes be any better? Equity financing is drying up for mid-budget English-language films - Bank of Ireland announced during Berlin it was closing its film-finance divisions - and sales companies cannot go to wary banks with anything but the most pessimistic sales estimates these days.

One major sales company is apparently looking at writing off some $60m in unhonoured contracts from buyers who have defaulted on payments, or from those who are going or have gone out of business.

Screen reported during the EFM that rival US sellers are developing a friendly system of checks on bad buyers, tipping each other off about who is unreliable and who cannot make their payments. A meeting of sellers and banks is being planned in Los Angeles in the next few weeks to consolidate the blacklist.

All of which leaves us with the well-capitalised local distributors who have always been the backbone of the independent film business. There are only a handful in each territory but they are the go-to companies for sellers. Who doesn't want to talk to Entertainment or Metropolitan or Concorde/TMG or Pathe? Some - Sammy, Nigel - just go by their first names.

These companies have money in the bank or powerful backers, and have years of experience, acquisitions clout and marketing expertise. They have enjoyed some of the biggest hits outside the studio system in the last decade.

And these distributors - the ones who pay their advances on time and deliver overages to the producer - could become even more significant, if we are to believe financier Ben Waisbren in his keynote speech at the Screen European Film Summit in Berlin. He said films should not be made "without a distribution solution locked up. The gatekeeper is going to be the distributor and not the hedge fund saying, 'I want to be in the movie business.'"

He has a good point. As we wait - perhaps a long time - for the next funding wave, it is a good moment to reflect on all the movies which were made but shouldn't have been: all the movies which failed to secure sales or an audience, despite robust budgets and well-known actors; movies which were rushed into production, often on the basis of over-enthusiastic sales estimates.

These films got made in the video boom, they got made in the German Neuer Markt period, and during the insurance funding craze and the Wall Street avalanche of the last few years. Now, while we wait for the next funding source to identify itself, perhaps the independent business can refocus on what an audience wants to see.

Sales agents and their key distributor clients can work closely to ensure only strong scripts and marketable packages are given the greenlight. Packaging agents whose agenda has been to get a film made - often regardless of quality - need to regroup and re-educate talent as to the exigencies of the non-studio business these days. Flexible, affordable deals need to be worked out to make a film happen.

It's no secret the independent business has to go back to basics this year. But that's not a bad thing. Can any territory sustain the volume of films that has been swilling around? How can any distributor thrive when 20 films are opening every weekend?

For audiences, at least, the future is bright - fewer but better films.

Tim Bevan seen as frontrunner to be UK Film Council chairman
Geoffrey Macnab in London
17 Apr 2009 16:53



Working Title co-chairman Tim Bevan is emerging as a front-runner to become the new chairman of the UK Film Council when current chair Stewart Till leaves at the end of July. Bevan has confirmed his candidacy for the job, which is on an unpaid part-time basis but is still a hugely influential position at a difficult time for the UK film industry.



Interviews are being held this month. The appointment will be announced by the Department of Culture, Media and Sport (DCMS) in the summer.


The UK industry will look to the new chairman to safeguard UKFC’s place at the heart of British film culture, both as a funding body and as the organisation which shapes UK government policy toward film.


“It’s going to be an increasingly tough battle to fight for the retention of (public) resources for film given all the other demands on Lottery funding,” commented Origin Pictures’ David Thompson. “Film is consistently now seen as vulnerable along with other sectors in the arts. Film has been in a strong position in the past. There is going to be a huge amount of lobbying required (from the new UKFC chairman). It will need someone with real political nous and the ability to navigate their way around both politics and industry. There will be less money around so how it’s spent will be important - the chairman will have a key role in that.”


Bevan’s relative youthfulness as well as his track record at Working Title would - many in the UK production sector suggest - make him an ideal candidate to succeed Till.


Till took the post in 2004, taking over from Alan Parker.

Village Roadshow falls short on funds
Film unit unable to deliver its share on four pics
By PAMELA MCCLINTOCK
Village Roadshow Pictures was unable, because of the credit crisis, to come through with the financing for the last four films it partnered on with Warner Bros., leaving the studio to cover at least $120 million in costs.
Time Warner disclosed Roadshow's funding crunch in its quarterly earnings report, issued Wednesday.

Australian company Roadshow has been Warners' co-financing partner since 1998. It's helped fund a long list of titles, including the "Matrix" franchise. The four films it was to have helped finance, but couldn't, were "Get Smart," "Gran Torino," "Nights in Rodanthe" and "Yes Man."

"Get Smart," "Torino" and "Rodanthe" were all box office successes, grossing north of $220 million worldwide. Among the films that Eastwood has directed, "Torino" is his biggest hit.

A Roadshow source said the company is in the process of restructuring its debt, and that it expects to secure a new line of credit as soon as the next two weeks.

Time Warner's earnings report suggested it was "unsure whether this co-financing partner will ultimately secure the funding for amounts due on these four 2008 productions or the funding it had committed for films slated for release in 2009. The difficulties in the credit market may also reduce the company's ability to attract other financial partners to co-finance its films."

Warner Bros. said the SEC requires such language, but that the studio isn't concerned about whether Roadshow will be able to meet its ongoing commitments.

"This is a temporary restructuring issue and we fully expect our partner to ultimately secure funding. At the end of the day, we make movies with partners and we make movies without partners. This is simply an issue of the times we're in," the studio said in a statement.

Warners and Village Roadshow are partners on the upcoming films "Sherlock Holmes" and "Where the Wild Things Are."

Village Roadshow's troubles come at a dicey time for the majors, who have come to rely on co-financing partners for the vast majority of their projects.

Warners' other major co-financing partner is Legendary Pictures.

Abu Dhabi's film division Imagenation and National Geographic Entertainment have kicked off the $100 million fund they established in October by making a significant equity investment in the Peter Weir-directed drama "The Way Back."
The deal kicks off a plan for Imagenation and NGE to develop, produce, finance and acquire 10-15 films over the next five years.

Imagenation and National Geographic become co-producers of "The Way Back" with Exclusive Media Group and Spitfire Pictures.

Currently shooting in Bulgaria, "The Way Back" stars Colin Farrell, Ed Harris, Saoirse Ronan and Jim Sturgess. Pic is based on Slavomir Rawicz's novel "The Long Walk: The True Story of a Trek to Freedom" about a small group of prisoners who escape a Siberian gulag in 1940 (Daily Variety, Oct. 16).More than one option(Co) Daily Variety
Filmography, Year, Role
(Co) Daily Variety

"It's just the kind of story we envisaged when we formed our relationship with National Geographic," said Imagenation chief exec Ed Borgerding. "It's a real story of human achievement against the odds and nature."

Said National Geographic Films president Adam Leipzig: "This was the perfect first film for our fund, a movie that National Geographic is proud to have its brand on."

Under Leipzig, NGF chairman Jake Eberts and National Geographic Global Media president Tim Kelly, the company will make two or three films each year. It will also acquire four to five films to be distributed through its own company, which last released "U2 3D."

"Imagenation and National Geographic certainly fit the economic jigsaw puzzle that goes into making these pictures, but the branding opportunity was also important to us," Exclusive co-CEO Nigel Sinclair said. "The National Geographic organization has enormous worldwide reach, and it's already helped come up with promotional ideas to present the film."

Exclusive Films Distribution is handling worldwide sales and distribution. On the domestic distribution front, Sinclair said the company is engaged in "various discussions we are excited about."

Weir will deliver the picture in November.

Imagenation's involvement with "The Way Back" is likely to be the first of many, as the shingle, which was launched in September with $1 billion in financing from the government of Abu Dhabi, ramps up its activities.

The company will shortly announce its first projects to emanate from its $250 million fund with Participant Media, launched in September. A further $250 million pact with Ashok Armitraj's Hyde Park Entertainment, inked last November, is also likely to start greenlighting its first projects shortly.

Abu Dhabi also has Robert Rodriguez's "Shorts," which was produced and financed through its multimedia partnership with Warner Bros., currently in post-production.

Monday marks the start of Paramount: The Next Generation.

After the exits of John Lesher (who, despite earlier reports, is heading toward a buyout, although he was offered a production deal) and Brad Weston on Friday, new Par film group prexy Adam Goodman and chairman-CEO Brad Grey will start dealing with the upcoming production sked -- as well as rethinking the management procedures.

In the past Grey has allowed his execs a lot of freedom in running the film division, but he's now expected to play a much bigger role.

The slate for 2010 is in good shape; many of the films are properties developed jointly with DreamWorks, while there are few internal Par-only projects. But Goodman (who previously held the title of production prexy) and Grey will be focusing on building the slate for 2011 and beyond.

Par's mandate is to distribute 14-16 pics per year, with DreamWorks Animation and Marvel together providing at least four.

Paramount said vice chairman Rob Moore will continue to oversee Goodman on business affairs. With Goodman's ascension, it's clear that the brief DreamWorks acquisition, which saw a lot of personality clashes, did have some benefits for Par. The studio still has the slate of projects it developed with DreamWorks and the possibility of working with the company again with out having to pay the annual overhead, Par got custody of a key DreamWorks exec.

While Paramount's marketing and distribution divisions scored record B.O. success in 2007 and 2008, the production side lagged. Many agents complained that it was hard to tie down deals there, and the film pipeline was too slow.

Par could no longer afford to rely on its own projects once DreamWorks departed and Par Vantage was folded into the parent. Studio execs still maintain that they have high hopes for the MTV-Nickelodeon film unit.

Filmmakers and producers with first-look deals include J.J. Abrams, Martin Scorsese, Lorenzo di Bonaventura and Brad Pitt.

It's ironic that the changes are happening just as the studio is enjoying a socko summer. Abrams' "Star Trek" rebirthed the franchise and "Transformers: Revenge of the Fallen," is expected to have a monster opening this weekend. But those hits couldn't mask problems at the studio.

Lesher may not have proved a perfect fit for the job, but he's the latest in Par's revolving door for the last five years (see chart). The production division has become Grey's Achilles heel, as he twice put film production in the hands of newcomers to that area: Gail Berman, a well-respected TV exec, and Lesher, who before his Paramount Vantage role had a long career as a top talent agent, most recently as a partner at Endeavor.

Goodman comes with far more film production experience than his two predecessors: He had been production prexy at DreamWorks, then took a top production job at Paramount six months ago, after DreamWorks and Par parted ways.

All of the studio's labels will report to Goodman, who learned a lot by working with Steven Spielberg and Stacey Snider -- and, crucially, has first-hand knowledge of the projects in development.

Ever since Par parent Viacom bought DreamWorks in December 2005, Goodman has overseen a string of commercial successes including "Transformers," "Hotel for Dogs," "Blades of Glory," "Disturbia," "Tropic Thunder" and "Eagle Eye."

"Adam has proven himself to be a terrific executive with a track record of having shepherded some incredibly successful films," Grey said in Friday's statement. "We have worked closely with Adam over the last few years and look forward to expanding his duties."

In that same press release (which described the studio as streamlining its exec structure), Grey said, "John (Lesher) has made great contributions to Paramount and has nurtured a series of powerful films which have had a true cultural impact. We look forward to working with him in the future."

Privately, however, higher-ups said the style of Lesher (and, to a lesser extent, Weston) alienated bosses, who didn't feel Lesher's behavior was in line with the corporation's "standards," in the words of one exec. But this is Hollywood, where personal lives always take a back seat to the bottom line, and the Lesher tenure points up some interesting questions for Par.

First, Lesher's key assets were good taste and strong talent relationships. But are those still the priorities for a studio exec in the new world order? There's a reason why other studios have teams — Fox's Jim Gianopulos and Tom Rothman, Sony's Amy Pascal and Michael Lynton, Universal's David Linde and Marc Shmuger — that provide checks and balances between creativity and the bottom line. That's one reason why Grey will need to be more hands-on in this third attempt to get it right on the film side. (After appointing relative newcomers Berman and Lesher, Grey tended to leave a lot of day-to-day decisions to his film executives.)

Second, since many of Par's biggest hits of the last few years were with other entities -- the first "Transformers" with DreamWorks, "Iron Man" with Marvel -- Grey and his team will have to figure out their relationships with other companies.

The Sherry Lansing regime was famous for making co-productions with other studios, giving them foreign rights. But with the UIP international partnership with Universal ended and the industry more focused on global tallies, Grey and his team will have to decide how much it wants to share.

The "Transformers" sequel looks to be a winner, but Par's recent Eddie Murphy pic "Imagine That" was the latest fizzle from the studio, following such titles as last summer's "The Love Guru" and recent release "Dance Flick."

Though Paramount proper has a great market share and some terrific tallies in the past few years, one exec in the know said that its profitability last year was below that of such specialty units as Fox Searchlight and Focus Features.

In his stint at Par Vantage, Lesher oversaw "An Inconvenient Truth," "Babel," "There Will Be Blood" and "No Country for Old Men." All of those were prestige films, but only the docu could be considered extremely profitable.

At parent Par, he and Weston oversaw "The Curious Case of Benjamin Button" and "Star Trek." While "Button" garnered plenty of media and Oscar attention, it was probably less profitable than "Juno," for example.

Weston played a key role in guiding Abrams' "Star Trek," but Abrams is safely ensconced on the lot via his first-look deal with Par.

Weston, who was prexy of production, is expected to get a production deal at Par. He joined the studio in 2005, shortly after Grey took over. He had previously been co-president of Dimension Films.

The studio's upcoming slate is dominated by remaining DreamWorks titles, DreamWorks Animation titles and Marvel projects. Par titles include "G.I. Joe: Rise of the Cobra," "Shutter Island," "The Last Airbender," Abrams' "Morning Glory" and "Footloose."

(Michael Fleming contributed to this report.)

Perfect pitch
31 July, 2009 | By Geoffrey Macnab


One of the biggest challenges facing the producers of a wave of new low-budget UK music films is how to afford the crucial soundtrack rights.


All you need is love, the Beatles sang, hopefully. Not if you are a UK film producer caught up in the latest trend for low-budget British rock biopics.

Since Control, Anton Corbijn’s well-received 2007 film about Joy Division frontman Ian Curtis, music-themed UK movies and biopics have come thick and fast. Actor-turned-director Nick Moran told the story of maverick 1960s record producer Joe Meek in Telstar, artist-turned-director Sam Taylor-Wood is bringing the young John Lennon to life in her debut feature, Nowhere Boy, now in post-production, while Mat Whitecross’ Ian Dury biopic, Sex & Drugs & Rock & Roll is shooting in London.

Producers think the artist will just say, “Yeah, fine.”But the artist will have signed the rights away.”

Ian Neil, music supervisor, Nowhere Boy


Also in the works is a new 1960s-set version of Brighton Rock, to be directed by Rowan Joffe (son of Roland) which will feature plentiful music from the era, and the 1980s-era Here Comes The Summer, to be directed by music journalist-turned-director Ron Scalpello, with music from The Undertones, The Clash and The Specials.

On a bigger budget level, Working Title recently released its 1960s pirate radio-station comedy The Boat ThatRocked, and has Hippie Hippie Shake, set in the same decade, in post.

“Music is about lifestyle and about attitude and lends itself to great imagery, whether in a coming-of-age story or a story of rebellion,” suggests Nick Angel, Working Title’s music supervisor, of the reason for the new wave of music-orientated UK films.

The challenge for independent producers is how to access rights and performance permissions for songs from legendary performing artists on a UK budget.

As the film-makers are discovering, the music business and the film industry work to very different rhythms. “The key is to get a music supervisor who is extremely well connected with the record companies and knows how to get quick results that fit with the budget of the film,” says Kevin Loader, one of the producers on Nowhere Boy.
Often, before a piece of music can be used, producers will need to ‘clear both sides’.

That is, they need permission from the publishers to the actual song and then a separate agreement (often with a different company) for a particular recording.

Money matters

Music supervisor Ian Neil, who is overseeing the soundtracks on both Nowhere Boy and Sex & Drugs & Rock & Roll and is soon to begin work on Brighton Rock, points out such films need to have the rights to most of their music arranged in order to attract the financing in the first place.

On Nowhere Boy, around 6% of the $9.9m (£6m) budget has been set aside for music. Neil speculates that if the same film had been made in the US, it would be likely to cost five times more. However, there are no set rules as to what percentage of a budget is allocated to music. Each case tends to be different.

When it comes to music rights, UK film is clearly a two-tier industry. This was illustrated recently when Working Title made The Boat That Rocked. The film-makers were keen to use Break On Through by The Doors. Sources close to the production will not say precisely how much was being asked for permission to play the song.

However, they acknowledge it was well over $1m -in other words, considerably more than the entire cost of many micro-budget UK movies. The song did not make it into the final film.

“When Working Title makes a movie, everyone rubs their hands with glee,” jokes Neil. “Generally, [Working Title] has $3.3m [£2m] to spend on music.” A big music budget can often be as much of a challenge as working on more straitened means. Nick Angel, Working Title’s music supervisor on The Boat That Rocked, needed to acquire close to 80 different pieces of music.

Angel believes the music companies’ attitude toward the UK film industry has changed. In the 1990s, the era of PolyGram in its pomp and of Trainspotting, they thought of films as “great big promotional vehicles for their up-and-coming repertoire or as a possible area to revive flagging careers”, he suggests.

Now, Angel believes music companies are more pragmatic. “Films are not the cash cows that labels [the record companies] used to think they were,” Angel suggests. He believes record companies are now much more interested in exploiting their frontline recording artists than in trying to promote catalogue titles.

But fewer record companies are investing in soundtrack albums. “[Soundtrack albums] are clearly not the big business they were,” says Loader. Even so, the producers of Nowhere Boy are keen to strike a deal for a soundtrack album. The upside is self-evident. “If you can get a record company to partner with you on the release of a soundtrack album, you can often get them to discount some of the prices on music used in the film,” says Loader.

Rights holders are well aware of the difference between a Working Title movie, backed by Universal Pictures, and a typical British film and will usually tailor what they charge accordingly. They know that if they charge too much, the movie simply will not be made -and that will be to nobody’s interest.

“The [music] publishing industry has reacted with realism and good grace in helping low-budget films pack some commercial punch,” says Loader. “It would be a terrible shame if you weren’t able to make a low-budget film about Ian Dury or Joy Division. They’re never going to make the Hollywood version.

Either you have the low-budget version or no version at all.” Nowhere Boy features a number of cover versions performed by the Quarrymen, one of the early bands in which Lennon played. Relatively few of the original Lennon/Paul McCartney songs are being used in the film. Instead, Neil set out to buy the publishing rights to various Elvis Presley, Buddy Holly and Eddie Cochrane songs.

This may have been less expensive than using the artists’ original recordings but was still not cheap. “We are buying the birth of rock’n’roll,” Neil explains. “They [the rights holders in the US] are used to getting money from Hollywood… and we’re not Hollywood.” Charm offensive Cash-strapped UK film-makers often need to charm rights holders to have any chance of securing the music they want.

When Neil was working on Terence Davies’ low-budget digital documentary Of Time And The City last year, Davies was desperate to use Peggy Lee’s The Folks That Live On The Hill. The film had a budget of less than $1m, so resources were very limited. The trick in this case was to send the rights holders copies of Davies’ earlier films and to spend months on an elaborate courtship process. In the end, the rights holders relented. They realised the film was an arthouse movie, not a multiplex blockbuster, and were ready to cut a deal on a reasonable basis.

Friends and family are often keen to be associated with the films. Sex & Drugs & Rock & Roll is being made with the approval of Dury’s son, and its star Andy Serkis is re-recording Ian Dury standards with Dury’s old band The Blockheads. Ian Curtis’ widow was closely involved with Control (loosely based on her book about Curtis) and Taylor-Wood will shortly be showing an early cut of Nowhere Boy to Lennon’s widow, Yoko Ono.

There is a natural symbiosis between the two industries. However, Neil tells cautionary tales about the continuing naivety of some young UK producers.

“[Producers] think they can just ring up and talk to the artist and the artist will go, ‘Yeah, yeah, that’s fine.’ But the artists will have signed the rights to the publishers and record companies,” he says.

“You have to be realistic. You can’t go with small-budget films to The Rolling Stones and ask for Jumpin’ Jack Flash or Gimme Shelter,” agrees Angel. (Stephen Woolley famously managed to make his 2005 film Stoned about The Rolling Stones’ Brian Jones without using a single one of the band’s songs on the soundtrack.) Regardless of a film’s budget, assessing just how much to pay, or indeed charge, for music rights is far from an exact science. Nor is it clear how long the market and audiences will support this fad for music biopics.


“I don’t think you can sustain too many of these at any one time,” says Ian Neil. “I love getting involved in them on a personal level, but I would be cautious and worried if I was being approached to do two of these every year.”

Members of the UK film industry have reacted with anger, bafflement and dismay at today’s shock DCMS decision to abolish the UK Film Council.

“What does it mean?” asked David Thompson of Origin Pictures, who said that he had first thought the news was an April Fool’s Day trick. “It’s hard to say what’s behind this,” Thompson said. He added that the UKFC was already restructuring and was “leaner and meaner” in the face of the economic downturn.

“It’s hard to say more without having a clue of what they (the Government) are proposing.” He added: “if the UKFC funding is cut, it would be a chronic blow.”

Others expressed bafflement that the abolition of the UKFC came only weeks after the new coalition Government had said it wasn’t going to merge the UKFC with the British Film Institute.

The DCMS Statement today talked about Government “establishing a direct and less bureaucratic relationship with the British Film Institute.” Did this mean that the BFI was going to take over the investment of Lottery money in film production? Nobody seemed to know yet.

What was clear today is that even the best connected industry figures were caught on the hoof by the Government move. “My reaction is one of total surprise and horror,” said film finance expert John Graydon of RSM Tenon. “It seems to have been done without any kind of consultation, at least with the industry. It has come completely out of the blue. I don’t understand how a decision like that can be reached without any thought or consultation.”

Jane Wright, Managing Director & Executive Director at BBC Films, was striking a similar tone. “I found the news deeply shocking. It really did come out of the blue,” Wright said.

She added that the abolition of UKFC was bound to cause “uncertainty” in British production circles. “I don’t fully understand, even with the missives that have gone out, what this exactly means for the range of activities which the Film Council did.”

Paul Trijbits of Ruby Films was yet another industry executive in shock. “This is literally a bolt from the blue for everybody in the industry, including the UK Film Council,” Tribijts said. “There has been no consultation, no evaluation, very little consideration of how to take forward the different parts that the film industry does. The (DCMS) statement begs many more questions than it answers.”

UK producers group Pact reacted in a subdued manner. Chief executive John McVay said: “We strongly welcome the coalition’s commitment to the two most important interventions in the market, namely the National Lottery funding and the film tax credit. These both ensure that we can produce indigenous feature films and also attract inward investment which, combined, sustain our vibrant, dynamic and successful film industry and we look forward to working with the government as they develop their thinking on how this essential public support will be delivered in future.”

Lord Puttnam, president of the Film Distributors’ Association, said in a statement: “Today’s announcement proposing the abolition of the UK Film Council, which would appear to have come out of the blue, will take some time to digest fully. Over the past decade, the Film Council has been a layer of strategic glue that’s helped bind the many parts of our disparate industry together. It is sure to be widely missed, not least because the UK cinema industry is in the midst of a fundamental transformation at the heart of which is digital roll-out. On the welcome premise that Government and Lottery support for film will continue, I look forward to discussing ways in which a new, coherent plan for film can be developed and implemented to benefit audiences throughout the UK.”

Notting Hill director Roger Michell of Directors UK, the professional body for UK film and television directors, called the announcement “catastrophic… for the film and the broader creative sector.” Michell, whose credits include Venus, Enduring Love and television series The Buddha Of Suburbia, continued: “We should not forget that film is an industry and one in which the UK excels both at home and abroad. We employ 36,000 people and contributed over £4.5bn to GDP in 2009. This is an astonishing decision by government – without the merest hint of consultation with either the wider film industry or the UK Film Council itself. The decision flies in the face of economic sense.”