EXCLUSIVE: In a seismic development for the indie film sector, which could have ripple effects across the whole film and TV ecosystem, bond companies are refusing to insure movies ahead of a potential SAG-AFTRA strike on July 1.
This eventuality has been bubbling behind the scenes for a little while, but its first known casualty is a high-profile case. Oscar winner Pawel Pawlikowski’s The Island, set to star Oscar winner Joaquin Phoenix (Joker) and Oscar nominee Rooney Mara (Carol), was due to get underway this month with the actors on location in Spain and ready to roll.
However, we understand the threat of a potential SAG-AFTRA strike — on top of the ongoing WGA strike and potential DGA action — has spooked bond companies and The Island filmmakers were told on the eve of shoot that the movie couldn’t be bonded, leading to their two stars (both SAG-AFTRA members) having to return home and the project being put on hold until further notice.
We understand that talent, financiers, and producers remain fully committed to the project, but when it can start up again remains to be seen.
Partners on the anticipated film include producers Tanya Seghatchian (The Power of the Dog) and John Woodward (Kaos), FilmNation, WME Independent, Vision Distribution and Wildside. Oscar winner Pawlikowski is known for movies including Cold War, Ida and My Summer of Love.
His latest movie was set to be bonded by the industry’s largest indie guarantor, Film Finances Inc (FFI). The filmmakers tried other companies but to no avail. We reached out to FFI, but the company declined to comment.
This is a major headache for those involved in this particular production, but also sector-wide. It poses the real possibility that very few independent films of scale will be able to get off the ground in coming months due to the uncertainty. It’s ironic that the impact won’t be felt much by AMPTP members given that studios self-bond.
One indie financier told us, “This issue has arisen on other projects and until we have clarity on the SAG-AFTRA situation, which is unlikely for the next month, then the problem will remain”.
It’s another unpleasant jolt after bonding for indie films disappeared during Covid when insurers wouldn’t take on pandemic risk and banks wouldn’t lend without a bond. It’s been estimated that as many as 400 projects fell away in 2020-21. Producers turned to private equity, contingency fees and other workarounds, but that gets harder the bigger the budget and indie projects, say, north of $10M-$15M often require additional financing.
As with Covid, costs would rise if there’s a strike, and many producers can’t take that on. If not, they’re looking to projects starting much later in the year or beyond. The risk there is that they would lose cast and/or a director already locked in for a particular window with a hard out.
SAG-AFTRA, which reps more than 160,000 entertainment and media professionals, last week announced that both its negotiating committee and National Board had unanimously agreed to authorize a strike ahead of contract negotiations with the AMPTP beginning on June 7. The guild’s current contract expires on June 30.
We hear that multiple bond companies now are reluctant to insure any sizeable movies whose shoot bleeds into this period.
The impact could also potentially extend to TV. Less so in the U.S., where series are largely backed by studios, but possibly on overseas series due to star SAG-AFTRA talent.
Meanwhile, the writers’ strike that began May 2 has no end in sight. Negotiations between producers and the WGA are at a stalemate. To date, TV productions have been targeted for picketing, with many being halted. Lionsgate’s Good Fortune is among very few films that have had to stop during production.
RELATED: TV Shows Affected By WGA Strike: ‘Duster’, ‘The Old Man’, Daytime Emmys & More – Updated List
Ahead of the ongoing Cannes Film Market, there was unease from financiers, sales companies, creatives and publicists about announcing projects amid a strike. In the end, dozens were announced and deals have been done, but the shadow of industrial action is starting to loom ever larger over the film sector. Many of the pre-sales done in Cannes on projects due to start in coming months will now have more clouds hanging over them in light of the insurance concerns.
Strikes are designed to create short-term pain in the hope of long-term change for the better. The unions are showing a united front so far, and their combined approach is being increasingly felt.
The Island is loosely based on a true story and centers on an American couple who turn their backs on civilization to build a secluded paradise on a deserted island, where they decide to live off the land. But Eden proves difficult to pull off, particularly after a European countess finds out about their plans and arrives with her two lovers planning to take over the island and build a luxury hotel.
Jill Goldsmith contributed to this report.
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