The Hollywood Reporter
At the Cannes Film Festival last year, Ukraine was on everyone’s mind. In the wake of Russia’s full-scale invasion of Ukraine on Feb. 24, 2022, the festival and its Cannes Film Market imposed a blanket ban on any Russian delegations or film companies connected to the Putin government.
Ukrainian President Volodymyr Zelenskyy even opened the festival, speaking from Kyiv via live video and calling on the global movie industry to take a stand for his country and against the aggressor nation. “Cinema must not be silent,” he said.
Cannes’ position hasn’t changed. At his pre-festival press conference on Monday, Cannes boss Thierry Frémaux, pointing to the Ukraine flag pin on his lapel, reminded the international press the French festival still stands in solidarity with the Ukrainian people. The market ban on Russian delegates and companies with ties to the Kremlin is still in place.
The studio boycott of Russia — Disney, Sony, Warner Bros. and Paramount all stopped releasing their films in the territory following Moscow’s invasion of Ukraine — also still stands.
But many in the independent film world are still, quietly and covertly, selling movies into the lucrative Russian market. With a handful of exceptions most indies never pushed pause on their Russian business.
The list of new indie titles that have secured a Russian release is long and varied, from STX’s Guy Ritchie war movie The Covenant and XYZ Films’ Berlin Film Festival favorite BlackBerry, to Goodfellas’ Iranian thriller Holy Spider, a Cannes competition film last year, to the surprise exploitation hit Winnie The Pooh: Blood and Honey from Premiere Entertainment.
With no Hollywood blockbusters to compete with inside Russia, independent titles can reap a box office bonanza.
“The Russian market is wide-open right now, the upside is tremendous, so it’s very tempting to sell to them right now,” noted one veteran sales rep, who would only speak off the record for this piece.
Lionsgate’s John Wick: Chapter 4, which was pre-sold to Russia before the invasion, and released via Russian distributor Atmosphere Kino, has grossed more than $10 million in the territory. A24’s Oscar winner Everything Everywhere All at Once, another pre-sale title, earned $1.64 million via Volga Films. Animated feature Paws of Fury: The Legend of Hank, a Paramount release in the U.S. but sold and distributed independently in much of the world, including Russia, grossed $2.78 million in the territory. Lionsgate, while they say they will continue to honor existing contracts — see John Wick — has stopped doing new business with Russian companies.
Most, however, have continued, noting that sanction lists of Russian firms drawn up by Western governments, with whom U.S. corporations are not allowed to do business, do not include film distribution companies.
Beta Cinema, a boutique European sales group, was active in Russia before the war but has entirely cut ties with its partners in the territory since the invasion. Beta Cinema boss Jan Mojto dismisses arguments, made by some sales companies who oppose a Russian boycott, that Western films could serve as an antidote to pro-Putin propaganda.
“There was the argument that people in East Germany who had access to Western TV would be inoculated from the communist propaganda and more likely to resist it,” said Mojto. “But, in fact, the ones who lived in areas with access to ‘West TV’ were less likely to protest and less likely to try and escape to the West. They escaped every evening – through television.”
There are also various circuitous, though perfectly legal, ways of selling films into Russia without doing business with a Russian company, such as going through an offshore firm based in a country not under the sanctions regime. Lionsgate sold John Wick 4 to Unicorn Media, a Malta-based group.
“Offshore companies are used to bridge the gap between Hollywood and Russia so that there are no direct contracts signed and Western companies that still want to trade with Russia do not spoil their image,” says Polina Tolmachova of the Ukrainian film producers association FILM.UA Group. “We can’t advise our colleagues on how to do business [but] the Russian Federation doesn’t show any repentance or will to change course, it’s looking more and more like a European North Korea. Anyone who adjusts to doing business without Russia now would be better off in the long run.”
Complicating matters is the fact that Russian film rights are typically packaged together with rights for the entire region — the so-called CIS territory encompassing 11 countries from the former Soviet Union. A U.S. firm can sell CIS rights to a film to a third party outside Russia that can then turn around and release the film in Russia, or sell it on to a Russian company.
Tolmachova would like to see a change in the licensing business, with contracts splitting off Ukraine from Russia. “Business is business, and every foreign production company is not obliged to check every company that buys rights from them,” she says, “But why can’t the world see Ukraine as an independent territory to sell rights to? The world is changing, and will never be the same again. The sooner old ties are broken and new ones are established, the more everyone will benefit.”
Source: Hollywood Reporter
