Peter Bart and Mike Fleming Jr. worked together for two decades at Daily Variety. In this occasional column, two old friends get together and grind their axes, mostly on the movie business.
FLEMING: Maybe my fatigue from Sundance is making me paranoid. Why no skepticism over Disney giving employees each $1,000, a spend of $125 million that it attributed squarely to President Trump’s tax overhaul? Isn’t is possible that Disney gave the president a victory so he’ll smile kindly on the Fox acquisition? AT&T did roughly the same thing back in December, right after the tax overhaul was passed, when CEO Randall Stephenson announced it would give $1,000 bonuses to 200,000 employees, and invest $1 billion in the U.S. in the next year, all because of Trump’s tax reform. Back when Hollywood drove the Hillary Clinton bandwagon, Trump the Republican candidate had few friends here. But maybe he’s found a way to become popular: merger-hungry conglomerates need Trump Administration approval for their merger aspirations.
BART: I agree with you on one point – yes, you are getting cranky. All of us keep talking about the Great Divide between the mega rich and the rest of humanity; so what’s wrong with Disney spreading a little largesse around? If it’s symbolic, at least it’s a good symbol. And tying it to a new higher education program will, as Bob Iger says, “have long term positive impact.” Let’s give Iger a break; he took a pay cut this year.
FLEMING: You are not helping me feel better. So Iger has to make do with what, $43 million in salary as his pay dropped $1 million? Now, Iger’s a hall of fame executive who has been touted as a potential presidential candidate on the Democratic ticket, and he donated $100,000 to the Hillary Victory Campaign, so he’s not switching sides. And who doesn’t like people being handed unexpected bonuses? But I find this troubling in a number of ways. President Trump has said that a massive cut in the corporate tax rate will result in jobs, jobs, jobs. Iger has said the Fox deal will result in a savings of $2 billion a year. Where’s that going to come from? The reduction of thousands of duplicative positions will account for a lot of it. Where is the governor of California or the mayor or anybody else, talking about what a major studio swallowing another major studio is going to mean to employment in the state when so many will be out of work during a period of contraction in this business? These people will be hard pressed to latch on elsewhere.
BART: On the topic of consolidation, I think all of us also have to “get real.” Of course there will be layoffs from deals like Disney-Fox, but Hollywood’s artisans will have to attune to change like the rest of the American work force. Consolidation is prompted by economic and technological development; workers must adapt to that development. New opportunity is springing up all over Hollywood. It’s time to join the stream team.
FLEMING: I feel like I am in a remake of Invasion Of The Body Snatchers, and my cantankerous co-star has just emerged from a cocoon pod with a smile on his face. I fear that we are being distracted by these bright shiny baubles, these paltry payments from benevolent corporations looking for headlines. I was raised to worry about my own job, every day, so blood on the street pains me. Maybe it is why it surprised me when the trades seemed to be rooting for a bankruptcy filing on the assets sale of the Weinstein Company. Elizabeth Contreras-Sweet and her backers — who are close to closing — were the only final bidders whose plans didn’t include a washing in bankruptcy, because it was the one intent on keeping the 150 or so employees who’ve stayed following the Harvey Weinstein scandal. How do you not root for this new company that is going to try and wipe off the smear of scandal and make a go of it not only with the library titles and active project but also the employees that once helped the company succeed? Contreras-Sweet promised jobs, a victims fund, a female-dominated board, and the repayment of all debts. Producers and talent who probably figured their projects would suffer the same fate as the ones at Relativity when that company crashed and burned, maybe have a new lease on life.
Also, let’s not forget how this Trump tax overhaul will destabilize homeowners. The dream of the middle class is to own your own home and have the government help with your property tax write off. That is now capped at $10,000, a high price for many to pay to provide this windfall to the richest 1% and their businesses ladling out $1,000 bonus checks. Shouldn’t Rupert Murdoch match those $1,000 payments to the Fox employees who’ll be out of jobs within a year? They’ll really need the money. It also seems the height of hypocrisy that Hollywood is now even appearing to embrace Trump given the litany of sexual harassment complaints lobbed at him. This is, after all, the issue that has rocked this town to its core, that turned the Golden Globes into a funeral, and rendered artists into pariahs instantly when accusations are leveled, none of which have been proven in any court of law. It hasn’t mattered in Hollywood whether men deny accusations in a trial by media atmosphere. The president denies things and moves on.
BART: Now, are the giant companies trying to butter up Trump? Again, let’s look at the bigger picture. In the past, the trust-busters have dealt with monopolies by breaking them up as with Standard Oil in 1911. Europe tends to break up mega companies and operate them as public utilities. But look at the present: the trust-busters are taking a laissez faire attitude toward tech oligopolies like Amazon, Google and Facebook. Amazon controls 40% of online shopping and Facebook and Google together control two thirds of online ad revenues in the U.S. And the chairman of Mass Mutual Life proclaims in Davos that Trump’s regulatory polices are “the greatest thing we’ve seen in 30 years.”
FLEMING: Flying in the face of what you said is President Trump’s escalating attacks on Amazon. Again, maybe it’s fatigue, but I don’t think he would be doing that if Jeff Bezos hadn’t bought the Washington Post and allowed it to continue its hard coverage of the president and all his administration’s scandals. And is it too much to imagine that the reason the Justice Department opposes AT&T and Time Warner is because our president hates CNN? That merger melds complementary components. You can’t say that about Disney-Fox.
BART: So if Disney combines with Fox and AT&T with Time Warner, that’s the real world, fellas. And if a few companies like US Bancorp, American Airlines and even Disney decide to hand out some ‘bonuses’ along the way, we would do well to acknowledge the largesse and say, ‘thank you, boss’. But you don’t have to smile when you say it.
FLEMING: I fear you are drinking the Kool-Aid. What flavor you do prefer? Grape is good, but it stains your tongue.
BART: On the other hand, we also have to keep an eye on the nasty little side-deals being made. For example, the Brits have taken a skeptical view of Rupert Murdoch’s attempt to confiscate all of Sky – a $16 billion deal to control the 61% he doesn’t already own. They want to resist the threat of Murdoch’s controlling the flow of TV news in the UK. If the Disney-Fox deal goes through, will Murdoch find a way of achieving his ends? Again, that’s a regulatory issue with important political consequences. The Brits deserve better than to inherit another Fox news.
FLEMING: A report in December Vanity Fair said the president was relieved when assured by Rupert Murdoch that he won’t sell Fox News and that his favorite Fox News show Fox & Friends would be left intact. Will Disney need to work harder to stay on the president’s good side – how about a Pixar movie about a carrot-hued president who saves the world from alien invasion? – we should expect Disney-Fox to pass with flying colors. AT&T and Time Warner should be an easier deal to approve, if not for that troublesome CNN. So, Peter, ask me about Sundance.
BART: Hey, how was Sundance?
FLEMING: Some lamented the lack of brisk sales, but I saw reason to be encouraged. The market reflected a sobriety and discipline not seen in recent years. As is not uncommon when you stay up all night chasing deals, I saw only one movie at a 9:30 premiere. I will have to see it again; it seemed swell, but it was so hard to focus that late in the evening after a busy day that I wondered how any of these distributors can make educated buying decisions after such a dizzying pace of movie watching. It’s cold, the air is thin, it’s a pain in the ass to get to these theaters and the seats are old and uncomfortable. I will never understand why Hollywood leaves the warm weather to endure Sundance, particularly when there is no time to ski or enjoy the beautiful vistas. The heated rush deal making is a problem and it’s not a bad thing that buyers are taking their time and spending reasonable amounts in minimum guarantees. Even though prestige films again dominated the Oscar nominations this week, the indie business is in a transitional phase because of elements that include the influx of streaming services. The one title everybody figured to be chasing – This Is Us creator Dan Fogelman’s Life Itself – was bought by Amazon in December and won’t be unveiled until the fall festivals. So there wasn’t really a must-have title, and so far there have been no deals from last year’s eight-figure bidders Fox Searchlight (Patti Cake$), Amazon (The Big Sick) and Netflix (Mudbound). Last year, Amazon and Netflix swallowed up everything. It seemed a sign of the apocalypse to established distribs who need to make the margins work and couldn’t compete. But those companies are evolving and prefer pre-buys and homegrown slates.
BART: The relative lack of action in the Sundance acquisitions arena that you report may reflect the weird cycle that keeps repeating itself. Distributors go through periods where they depend on festival acquisitions, then get burned and switch to developing and producing their own projects. After a few films go over budget and flop, they switch back to acquisitions. Is that’s what’s happening now? And will everyone ever learn that there has to be a balance between the two strategies – because there is no magic answer?
FLEMING: There was only one 8-figure deal, the $10 million minimum guarantee for Assassination Nation between NEON and AGBO – the latter part of the new company formed by filmmakers Joe and Anthony Russo. The deal, which calls for a wide theatrical release, illustrates how distribution on these films got done, with intriguing partnerships. NEON started the festival with the important bombshell that it was majority acquired by 30WEST, the progressive company run by Micah Green and Dan Friedkin. They drove much of the action from the festival, and will be a force going forward. Participant Media had the biggest TV sale to Starz with Steve James’ America To Me, and that $5 million seemed to be the going rate for top-shelf fare. Many felt that when we look back at Sundance, it will be with an acknowledgment that the market corrected itself. Films sold for what they were worth and nobody got hosed because the streamers weren’t inflating the market like last year.
Broad Green is dead, and that happens from time to time when billionaire film lovers jump in and leave with lightened wallets. But new players like NEON and 30WEST brought reason to feel optimistic. Also cause for cautious optimism is the potential for the Elizabeth Contreras-Sweet company that rises from the ashes with the assets from The Weinstein Company. She didn’t close a deal in time for Sundance, but could be a player in Berlin and Cannes. As for the movies, a lot of them will find homes as the festival concludes this weekend – SPC’s deal for Puzzle and Annapurna’s deal for Sorry To Bother You happened today, and Global Road and others are circling Burden. The indie ecosystem is fragile, and just as the business remade itself after bottoming out in 2008, it is evolving again so it can survive because this is the point of entry for worthy new filmmaker voices from Damien Chazelle to Jordan Peele, to the Russo Brothers, Christopher Nolan and so many others.