Indie Films Hope to Find Life on the Auction Block

If the selling of independently made movies has become a major rat race, Chicago entertainment attorney Hal Kessler hopes he’s come up with a better mousetrap: Auctioning off new films to the highest bidders.

Friday, Kessler’s recently formed Art in Motion will attempt to sell 15 independently made films at a Films4Auction black-tie event conducted by the William Doyle Galleries at Los Angeles’ Bel Age Hotel. The auction will also be simulcast on the Internet by Flixnetwork.com.

No one has ever tried to sell movies at an auction like this. (There were bankruptcy auctions for Orion Pictures’ “The Addams Family� and other films as well as Carolco Pictures’ properties, including sequel rights to movies like “Terminator 2� to various companies.)

But Kessler and his partners, producers Ricardo del Rio and Ramiro Gonzalez, think that if everything from Marilyn Monroe’s dresses to Disney animation cels can be put on the block, they argue, why not feature-length films?

Since Art in Motion was announced last fall in the film industry trades, Kessler and his partners received more than 50 submissions, narrowing it down to a manageable 15 films that were deemed to be both credible and salable. They include comedies, dramas, documentaries and even a foreign-language film title--with production budgets ranging from $100,000 to $2 million. While some of the films have been shopped to distributors previously, few of them have been seen widely, and two are world premieres. Screenings at the Nuart and NuWilshire theaters and Raleigh Studios began Tuesday and will continue through Thursday, with each film being shown twice.

“It’s an interesting concept,� says Nick Stiliades, general manager of the Canadian foreign sales company S Entertainment. “After all, EBay seems to be working.� And, Stiliades reasons, there are often bidding wars for movies and scripts. Why not concentrate it into the period of an evening?

The idea for an auction, according to Kessler, was born out of frustration with the very limited way in which movies are currently sold. Kessler, who has been executive producer on two independent films--1994’s “The Sum of Us� starring Russell Crowe and the more recent “Finding North� starring John Benjamin Hickey (both of which were released theatrically)--is aware of the difficulty of finding distribution for independently financed movies.

“The struggle is monumental,� says Kessler, who estimates that of the approximately 2,500 independent films made each year, only about 40 or 50 receive any kind of distribution. Most of them are sold via screenings at the major film festivals--Sundance, Toronto, Cannes. But not all festival films are picked up for theatrical distribution. Some genre films--usually action or suspense and, in some cases, comedies with higher-profile casts--also sometimes get picked up. Everything else falls between the cracks, dashing the hopes of both investors and fledgling filmmakers.

Kessler finds it hard to believe that all those orphan films are without merit. Even if some titles aren’t appropriate for U.S. theatrical distribution, with the increased appetite for product on foreign cable and satellite systems, more films should be able to find some kind of audience.

Another problem with the current system is the arcane and byzantine manner of motion picture accounting, which is daunting to inexperienced producers. “When you have a simple seven-page sales contract for a film accompanied by a 37-page definition of what constitutes net profits, something is wrong,� Kessler says.

What Art in Motion is attempting with Films4Auction is to simplify the process. Films will be sold outright “at a fair market value,� rather than having the distributor pick the movie up for what amounts to a long-term lease, which is how independently made films are sold today. “This way the distributor owns the movie and doesn’t have to account or report to the producers. The fair market will dictate the price he pays. And then it’s his.�

For the films that sell, producers will pay a 20% fee, split between Doyle Galleries and Art in Motion.

The filmmakers participating in the auction are realistic about their chances, but willing to take the risk. Karchi Perlmann, who produced the dark comedy “Rose’s,� about an interracial friendship, is hoping the auction will succeed where his other efforts have failed. “Rose’s� has played several film festivals including Houston, the Hamptons and Boston, and has been shopped to distributors.

“Even though it performs well with audiences, nobody has wanted to buy it yet,� Perlmann says. He suspects that none of the real decision-makers at a particular company have even seen the film. “It probably stopped with a 25-year-old junior executive.�

The auction will attract worldwide buyers in town for the American Film Market, who will perhaps better understand the films’ marketable qualities. Perlmann would like to sell it and just move on. But, he admits, “it’s a long shot. I know how distributors think.�

Writer-director-producer Nur Nur Cummings, whose relationship comedy “Only in L.A.� premiered at the traveling Angel City Film Festival this month, has only shown the film’s trailer to distributors since completing post-production six months ago. He has held back, he says, because he hasn’t got the money to create promotional materials and rent screening rooms and invite buyers. He spent it all on the movie. For him, the publicity surrounding the auction offers an inexpensive way to draw attention to his film. “It gives me a much higher profile than I could do myself,� Cummings says. “An auction is an unusual idea, but my film’s unusual.�

The writer-director of “Killing Cinderella,� Lisa Abbatiello, has chosen the auction as the film’s world premiere. The romantic comedy is one of the few films that actually has a fairly well-known name in the cast, Jessica Capshaw, the actress daughter of Kate Capshaw. Abbatiello decided the film festival route was not right for her movie, which despite its limited budget is a conventional Hollywood comedy.

“The auction offers more potential distributors who might be willing to buy it for cable or video,� Abbatiello says. “The story is actually a good basis for a sitcom.� If her film doesn’t sell, Abbatiello is prepared to take a “more personal route, going door to door.�

Although they endorse the concept of an auction, some buyers are questioning the timing--right on the heels of AFM--when they’re likely to be suffering battle fatigue. But it could actually work, Stiliades says, especially if he finds nothing to buy at AFM and doesn’t want to go home empty-handed.

His main problem is that he deems many of the minimum bids “unrealistic� and hopes the filmmakers can be persuaded to sell their films at a lower price if there are no bites at the auction.

Seth Nagel, director of theatrical and ancillary acquisitions for USA Films, was also enthused by the idea of an auction, but was hoping for a better selection. He says he’s “underwhelmed� by most of the titles, few of which he thinks have a chance theatrically.

“Most [of the films] have been around for a while and we’ve already seen a number of them,� Nagel says. Still, if the price is right he might pick something up for USA’s cable or home video divisions. “I know there are movies out there that, if they were available at a price, people would buy. And who knows, maybe there’s a gem in there.�

Kessler has no illusions that all the films will sell. Even just one would be a start, three or four would be terrific. “Even if we sell only a few movies, we will be instantly credible and create a venue that never existed before,� he says.

“We had three objectives,� he says. “The first was to get sufficient product, and we did. The second was to have value, and we believe we have more than enough. The third is whether people will buy. We’re not going to know the answer to that until March 3.�