NEWSLETTER:  THE FILM ENTREPRENEUR

Indie Distribution: Everything Old Is New Again

August 2001

Way back in the dark ages of independent film distribution (early 1990s),Vestron and other companies closed their doors. "Woe is me," the prognosticators said. "That's the end of independent film." New companies came in to fill the breach. Miramax became a hit and was bought by The Walt Disney Company. 

Once again, general wisdom said that it was the end of independent distribution. Suddenly, we had Artisan and Lions Gate Entertainment. In the past two months, specialized distributors have declared bankruptcy, tried to buy each other or simply disappeared temporarily.

Never fear. New (or somewhat new) indie distributors always appear to fill the breach. From out of the East in August appeared Bingham Ray, the Co-Founder of October Films, to take over as President of United Artists (UA), the specialty division of MGM. UA will relocate to New York as part of the deal. "Bingham is one of the most talented and highly regarded independent filmmakers in the business," commented MGM Vice-Chairman and COO Chris McGurk in a prepared statement. Ray told screendaily.com, "I've been on the outside for two years. The independent world is in confusion." 

Well, maybe yes, maybe no. When The Blair Witch Project premiered at Sundance, he told your editor that he didn't like the film and, since then, has used it as an example of what is wrong with independent film. But it is good to have him back.

His Co-Founder of October Films (which went on to become part of Universal and then USA Films), Jeff Lipsky, has partnered with his brother Mark in Lot 47 to distribute specialty films. Returning to his original October roots, Lipsky said in a "Letter to the Editor" in indieWIRE in July, "At Lot 47 Films, we don't censor filmmakers. We didn't cut L.I.E and we won't touch a frame of Claire Denis' upcoming controversial and graphic masterpiece Trouble Every Day. In fact, we give our directors final cut."

On the "where are they now" side of the slate, Shooting Gallery, with legal challenges and creditor lawsuits, finally closed the doors when its parent company Itemus officially declared bankruptcy the first week of August. The company had been in trouble since it bought SG in May as part of a $23M stock-swap deal. Meanwhile, Shooting Gallery has an investor lawsuit that claims executives had converted funds from individual film LLCs for other purposes. The investors also accuse management of failing to repay them for up to five projects, including You Can Count On Me. All indie filmmakers who are planning on using money from an LLC for something other than your movie's budget: Not a good idea. Your film might accidentally be successful.

Meanwhile, Lions Gate and Artisan were trading comments on proposed buyouts in both directions that no one would verify. When Artisan cancelled an earlier IFP due to "market conditions" and Lions Gate closed its New York office to consolidate in Los Angeles, it appeared that neither company was that healthy financially. Then Lions Gate fired its auditors. 

In June, Artisan approached Lions Gate about a possible acquisition of the Canadian company, after rejecting a bid from Lions Gate to buy Artisan. Considering their varying financial histories, the two companies have not yet agreed on each other's valuations, a key barrier to any merger talks. And to add to the "confusion," meanwhile, Fine Line, the specialty division of New Line, has suspended its remaining releases until 2002. The company that has Hedwig and the Angry Inch and The Anniversary Party in current release also has decided to bow out of this year's annual Oscar battle.