2019-09-04 The Hollywood Reporter

Behind the Headlines

The Report

THE HOLLYWOOD REPORTER 14 SEPTEMBER 4, 2019

BAN

K,^ Q

UA

RTE

RS:^

AD

OBE

ST

OC

K.^ E

LLIS

ON

:^ AL

BER

TO^

E.^ R

OD

RIG

UEZ

/GE

TTY

IMA

GES

.^ MO

DIN

E:^ J

EAN

BA

PTI

STE

LA

CRO

IX/W

IRE

IMA

GE.

AU

STI

N:^ J

ON^

KOP

ALO

FF/

GET

TY^

IMA

GES

.^ CA

RTE

RIS

:^ DA

N^ M

ACM

EDA

N/G

ETT

Y^ IM

AGE

S.^

A

fter escaping a bankruptcy scare and
restructuring its debt in late August,
Megan Ellison’s Annapurna Pictures
is moving forward with full steam and is
“excited about the path ahead,” says chief con-
tent officer Sue Naegle.
But a pivot is a near certainty after
the company blew through roughly
$200 million in revolving credit used
to release such box office misfires
as Destroyer ($5.6 million globally),
The Sisters Brothers ($13.1 mi l lion) and the
August release Where’d You Go, Bernadette
($7.5 mi l lion).
What that evolution looks like remains
to be determined. For now, the company
will take a breather on acquisitions — both
Destroyer and Sisters Brothers were Cannes
pickups — and is not planning to buy any-
thing at the upcoming Toronto market.
Annapurna is sending four executives to the
festival, but Ellison will not be one of them
as she was in 2018, when the studio screened
three films at TIFF including Barry Jenkins’
If Beale Street Could Talk.

giving them a traditional theatrical release,

a strategy she has largely resisted in the past.

But that approach worked on the Coen broth-

ers’ The Ballad of Buster Scruggs, which was

released by Netflix and was nominated for

three Oscars. “Our intention is the same as

always — to make great content across film,

games, TV and theater,” adds Naegle.

Others foresee an inevitable shift. “Megan

will have to change her way of doing business,”

says Creative Wealth Media’s Jason Cloth,

one of the most active financiers in the indie

space, whose producing credits include Joker.

“She’s got an absolutely fantastic creative eye.

Nobody can dispute that. But the economics

of making a movie are not such that you can

make a top-quality movie at a price where

everyone makes money.”

Carteris Survives SAG-AFTRA Election Drama, Vows New ‘Leverage’

W

hen the dust cleared on
the union’s national elec-
tion early on Aug. 29, Gabrielle
Carteris, SAG-AFTRA president for
the past three and a half years, won
another two-year term, and victo-
ries on the national board mean
that Unite for Strength and its allies
will keep control of the union, as
they have since 2009.
But Carteris, 58, garnered only
a plurality over her opponent,
MembershipFirst’s Matthew
Modine, and the slate, which held
sway from 2005 to 2009, is res-
tive, resurgent and wants back
in the driver’s seat. MF won 13 of
16 national board seats from Los
Angeles and also now dominates
the L.A. local board, meaning that
Carteris can expect vigorous debate

and dissension in the boardroom for

the foreseeable future.

Speaking after her election

win, Carteris tells THR that the

gains made for the union with

a comprehensive Netflix deal

covering live action, dubbing and

performance capture will only

better the position of SAG-AFTRA,

which represents 160,000 mem-

bers, in upcoming talks. “Having

this kind of deal in place in the

lead-up to our industrywide TV/

theatrical contract negotiations is

invaluable,” she says.

The Netflix pact also gives SAG-

AFTRA the ability to threaten a

selective strike against legacy media

companies when that master TV/

theatrical deal expires on June 30.

“We have achieved a type of lever-

age that goes above and beyond this

particular negotiation,” says Carteris

of the streaming pact.

Other priorities for the next two

years include organizing work

opportunities and enhancing safety,

diversity and inclusion. “We antici-

pate this is where we will spend a

lot of energy and efforts,” Carteris

says. “As we expand safety enforce-

ment and protecting our members

in emerging arenas, we will remain

vigilant and transparent.”

After a bitterly fought election,

the incumbent will be tasked with

maintaining solidarity and keep-

ing up with a changing landscape

for performers.

“Rapid technological evolution

in our industry is definitely a chal-

lenge, but one we are working to

meet,” Carteris says. “We’ve taken

several steps, including engaging

our TV/theatrical negotiating com-

mittee early so that they are ready

for what’s to come.”

After renegotiating a new deal with lenders, Annapurna won’t be looking for movies

at Toronto but is planning to produce more homegrown fare BY TATIANA SIEGEL

Megan Ellison Plots

More Frugal ‘Path Ahead’

Building on the union’s strategic Netflix deal is a major priority, the re-elected leader tells THR BY JONATHAN HANDEL

Instead, the company will focus on its

homegrown fare and plans to be in produc-

tion on one unnamed title later this year or

in the first quarter of 2020. Most important

to Ellison, there are no planned layoffs for

the staff of 70 (the billionaire heiress

has been covering payroll with her own

funds and bought the West Hollywood

office building that Annapurna rents).

How close was Annapurna to filing for

bankruptcy and joining the list of mini-

majors like Relativity and Open Road that

couldn’t cover the hefty overhead that comes

with distributing movies? One source called

August a “do-or-die moment” for Annapurna,

which retained a bankruptcy firm. The source

adds that Ellison’s father, Oracle founder

Larry Ellison, used the threat of bankruptcy in

order to negotiate a favorable 82 cents on the

dollar payback deal with Annapurna’s lenders.

“The bankruptcy option made the banks take

him seriously,” says the source.

There are no new mandates yet, but Megan

Ellison is open to taking some of Annapurna’s

future titles straight to streaming rather than

Ellison

Gabrielle

Carteris

Matthew

Modine

Jane

Austin

44.1%

13,537 votes

34.8%

10,682 votes

16.4%

5,048 votes

National

turnout was

21.2 percent