EXCLUSIVE: The conversation tonight in Berlin, New York and Los Angeles is that distributor Alchemy is facing some serious financial turmoil. On top of today’s news that the company’s Cannes acquisition The Lobster was segueing to A24, Deadline has learned that Alchemy reduced its workforce by as much as 40%-50% during the past week. In addition, a big question mark hangs over its forthcoming feature film slate, which includes Cannes pickup Mia Madre from Nanni Moretti, Ben Wheatley’s Free Fire, Lucile Hadzihalilovic’s Evolution, and James Franco’s Zeroville.
Sales agents who had sold titles to Alchemy reportedly were scrambling at Berlin’s European Film Market to find new homes for their titles, in the wake of The Lobster move. Deadline also received word that media buys for planned upcoming releases including Mia Madre were canceled.
Sources tell Deadline that Alchemy’s liquidity challenges stem from its acquisition of content distribution outfit ANconnect and Anderson Digital in July, when then-CEO Bill Lee was at the helm. Essentially, Alchemy went from a distribution label that acquired and released movies to a company that had to service output deals of 50 clients including Bagdasarian Productions, owner of the Alvin And The Chipmunks franchise; DreamWorks Animation’s nontheatrical and classics divisions; Vertical; Well Go USA; and XLrator among others.
A spokesperson at Alchemy told Deadline in response to the company’s reductions: “Our commitment at Alchemy is to our stakeholders and partners within the retail and filmmaking communities. As innovators in distribution, Alchemy has strived to strengthen its alliances and capabilities through the acquisition of several businesses over the past year. While vastly expanding our ability to service our partners, Alchemy has had to conduct extensive internal reviews to address redundancies and duplication created by the mergers. As a result, we have made the difficult decision to reduce staff as necessary to improve efficiencies and ensure sustainable market leadership.”
In regards to the financial problems, the spokesperson added: “Alchemy’s new management team has uncovered some discrepancies within parts of its businesses. As a result, we are working tirelessly and, more importantly, we are committed to fixing each and every situation that we are faced with in order to reemerge with renewed commitments and stronger alliances.”
One non-Alchemy source who conducts business with the company believes it could be in a position to secure additional financing, but how soon remains the question.
Alchemy went on a huge acquisition spree at Cannes in May, and in addition to The Lobster and Mia Madre snapped up Gaspar Noe’s Love. At the Toronto Film Festival, it picked up Zeroville; prior to the fest, it acquired French-language horror film Evolution. Deadline was informed that the company didn’t unload The Lobster per se, rather CAA stepped in to take the Yorgos Lanthimos film back and find it a better home, which was with New York-based A24. CAA also handled the sale of The Lobster in Cannes.
While Alchemy did not purchase titles out of last month’s Sundance, last week it took worldwide rights along with ARC Entertainment to Imogen Poots’ A Country Called Home. The film played at the Los Angeles Film Festival and is set to debut February 26 theatrically and March 1 on VOD. Alchemy’s SXSW 2015 documentary pickup, Mitch Dickman’s Rolling Papers, remains scheduled to open day-and-date theatrically and on VOD this Friday.
Alchemy’s 2015 slate, which consisted of six titles, grossed $2.7M. Of that number, 63% ($1.7M) came from the movie Meet The Patels.
Lee exited Alchemy as CEO in an early-December shakeup at the company, which saw Kelly Summers and Scott Guthrie appointed co-presidents. The Alchemy label was revealed in January 2015 from the company formerly known as Millennium Entertainment. The rebrand came five months after then-CEO Lee and private investment firm Virgo Investment Group LLC partnered to buy out the stake of Avi Lerner’s Nu Image/Millennium Films.