Cannes Festival Divided Over Dealmaking in Russia, Some Reluctant to Give Up ‘Financially Lucrative’ Market

With a Ukrainian cinema union issuing a strident call on Thursday for participants of the Cannes Film Market to halt all business with Russia rather than support “terrorism,” industry professionals are again weighing the moral cost of working in the country against the financial upside of releasing films in the lucrative Russian market.

Many U.S. and foreign companies quietly continued to do business with the pariah state after the Ukraine invasion or resumed the dealmaking that was put on pause once the war began. Honoring contracts that were signed before fighting commenced or working through third-party distributors in other jurisdictions, they’ve ensured that a steady stream of foreign content — including Lionsgate’s “John Wick: Chapter 4” and A24’s Oscar-winner “Everything Everywhere All at Once” — continues to reach Russian movie theaters.

But while those often circuitous, sometimes murky, arrangements are perfectly legal if sanctioned entities aren’t involved, the statement from the Ukrainian League of Cinemas sought to define the situation in more concrete terms.

“Continuing to do business in Russia means supporting the Russian terrorist state with taxes,” the statement read. “These taxes are then turned into weapons with which peaceful Ukrainian cities are destroyed, and our friends and colleagues are killed and maimed.”

That message resonates with many marketgoers. One veteran European sales rep who requested anonymity insists that foreign companies willingly turn a blind eye to the ethics of releasing films in Russia, preferring to reap the windfalls in what was the world’s sixth-largest theatrical market in 2021.

“We’ve been discussing these arguments for months between sales agents,” they said. “The reality is that it’s far more financially lucrative to continue trading with Russia than losing out if the films were to be pirated.”

A leading Russian distributor, meanwhile, who’s based elsewhere in Europe and frequently acquires movie rights for both Russia and Ukraine, perhaps best summed up the ambivalence felt by those doing business in the region, telling Variety: “I really don’t have any justification for continuing working with Russia. I just don’t have a clear answer for that, even for myself.”

The debate shouldn’t be limited to the sales reps wheeling and dealing this week at the Cannes Market, according to Charlie Bloye, chief executive of Film Export U.K.

“I think the focus needs to move away from the sales agents themselves to the producers and financiers that they work for,” he said. “Most U.K. sales agents would readily forego their commission and not deal with Russia but they’re not necessarily in the driving seat. If the realtor says a drug dealer wants to buy your house, it’s your choice what to do, not the realtor’s.”

The uncertainty extends beyond the simple question of whether foreign companies should continue to cash in at the Russian box office. Historically, Russian distributors have acquired not only the rights to their own country but also those of the former Soviet territories, including Ukraine — an arrangement the cinema union singled out on Thursday for its “special cynicism.”

Speaking to Variety, Ukrainian producer and distributor Denis Ivanov called on world sales agents to “stop this sick practice,” which allows Russian distributors to profit from what was once the second- biggest theatrical market in the former Soviet Union — and, by extension, to pump more Russian tax dollars into Putin’s war effort. “Ukrainian cinemas … don’t want to support the attacks on our cities,” Ivanov said.

The process of uncoupling the Ukrainian market from its larger neighbor’s might be slowly underway, according to Joel Chapron, an expert on the Russian film industry who is based in Paris.

Chapron estimates that upwards of 80% of French sales agents have begun separating Ukraine rights from those of other Commonwealth of Independent States (CIS) territories, as the ex-Soviet countries are known. “They understand that Ukrainians don’t want to buy French movies from Russian distributors,” he said.

That shift could be the first step toward a broader transformation of the regional market, where smaller territories are finally able to wrest rights away from their larger, swaggering neighbor. But Russia remains the alpha dog in the region, pulling in roughly 80%-90% of B.O. When change might come, said Chapron, is “hard to say.”

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