HOW “DELIVERY ISSUES” LED TO STRANGERS WITH CANDY AND FACTOTUM GETTING DROPPED BY THEIR U.S. DISTRIBUTORS.

By Anthony Kaufman

At last year’s Sundance Film Festival, Warner Independent Pictures made a reportedly sweet $3 million deal for Strangers With Candy, Paul Dinello’s big-screen adaptation of Amy Sedaris’s Comedy Central cult TV show. “Strangers With Candy completely caught me off guard,” WIP president Mark Gill said in a prepared statement. “It is rude, hilarious and bizarre. We loved it.” Nine months later the company’s adoration turned sour. As of press time, the film’s rights were being handed back to the producers, Worldwide Pants, by WIP, which claimed that the film was not properly “delivered” to them. And right around the time of this story’s publication, another film, Bent Hamer’s Factotum (which was acquired after its Cannes 2005 premiere) was dropped by another Time Warner subsidiary, Picturehouse Films, which also cited “delivery issues” for the movie’s dismissal.

But why specifically did the Strangers With Candy and Factotum pacts collapse? Regarding Candy, producer Mark Roberts says that Warner’s official reason had to do with dozens of items — rumored to be posters, props and garage sale oddities that Sedaris’s 46-year-old high school student Jerri Blank has on her walls — that the company alleges were not properly cleared. “But there might be more details as to why Warner dropped the film,” says Roberts. “There were lots of guarantees. I know that errors-and-omissions insurance covered every item in the film, so whatever impasse Warner Bros. came to, I’m not aware of what it is.”

“We solved the clearance issues,” agrees Candy producer Lorena David. “We delivered the film; it was bubble-wrapped.”

But Warner Independent wasn’t convinced it was protected from legal liabilities. “The fact is that the film which was delivered to WIP had significant problems from a legal clearance and insurance standpoint, which prevented us from being able to release the film,” says Warner Independent’s senior VP Paul Federbush. “I would also like to say that this has been the most heartbreaking experience of my career.”

Some speculated that a contributing factor to WIP’s decision to drop the film was a lawsuit filed last summer against Warner Bros.’ Dukes of Hazzard for copyright infringement. Warner Bros. eventually paid $17.5 million out of court to the plaintiff, a ruling that may have had a chilling effect on the studio and its subsidiary. And though the Hazzard case dealt not with errant poster clearances but a chink in the film’s all-important chain of title — the studio hadn’t acquired movie rights to the ’70s TV show’s original source material (a 1975 film called Moonrunners) — the large cash settlement agreed to just days before the film’s release on thousands of screens put a spotlight on the studio as a potential litigation target. Some have speculated that the Dukes of Hazzard episode prompted Warner Bros.’ legal team to take a hard look at items in other films that might set off lawsuits.

But what makes the Strangers situation intriguing to outsiders and downright terrifying to indie producers is the potential, say industry insiders, for clearance conflicts to be used as an excuse by distributors experiencing buyer’s remorse to back out of a deal.

Indie sales icon John Pierson, famous for selling Michael Moore’s Roger & Me to Warner Bros. for $3 million, remembers the case of Diane Kurys’s Six Days, Six Nights, a French-language film acquired by Fine Line in the mid-1990s. Following a regime change, the company claimed the film wasn’t delivered properly and dropped it, even after posters were up and a trailer was ready. The case went to arbitration: Pierson testified as an expert witness for the filmmakers; New Line won. “It was strictly a legal definition on delivery since MANY films open without having been ‘delivered’ on paper (or paid for),” Pierson writes via e-mail.

Whether WIP was being ridiculously overprotective, looking for a way out, or the Candy crew was excessively negligent, Roberts has a warning for filmmakers seeking big distribution deals this Sundance. “Be careful,” he says. “Keep an eye on everything that’s in your movie from the beginning of the picture to the end.”

Rick Butler, a production designer who worked on Pieces of April and Imaginary Heroes, admits that artwork clearance issues are a constant worry. “Any prop or proprietary item or copyrighted item is potentially a lawsuit.” On a low budget, with a small staff and shortening prep times, the process of clearing props can be overwhelming. A seemingly innocuous tchotchke sitting on a bureau or a bad painting in the background can require a lengthy and often costly clearance process. And when filmmakers find themselves waiting on legal consultants as the sun is setting or their lead actor is getting ready to leave the set for a commercial job, it can be a challenge. “Production moves quickly,” adds Butler. “Lawyers do not.”

One of the larger issues at stake in the Candy mess is the continuing clash between indie filmmaking and the corporate world. As Roberts says, “It’s getting more difficult to become an artist at an indie level. If you have to take things off the wall [of your practical locations], you have to remove a level of artistic freedom.”

Filmmakers seeking a major deal with a mini-major, explains Roberts, “have to be aware of the delivery requirements of the studios. If it’s a classics division, the delivery requirements are the same as what their bigger pictures require.” And for indies, those delivery elements — all of the legal paperwork indemnifying the company against liens, signed contracts from cast and crew, clearances, and technical elements required for exhibition, ranging from sound and video transfers to music licenses and check prints — can be daunting. “Indie production offices don’t have those kinds of resources,” says Butler, referring to the studio-level demands often linked to star-studded high-profile indie projects. “They can’t afford an in-house professional who will carefully cover art placement and product placement and make sure the paper trail is firmly in place. It’s just not affordable.”

But that’s exactly what the studios expect, according to Picturehouse’s Bob Berney, who says Factotum was dropped because the filmmakers did not want to foot the bill for a requisite TV version as well as some further clearances. “You need to hire someone to effectively deliver a film,” he says. “You need to budget for it.” But Berney acknowledges it’s getting more difficult: “I think the television demands, the new formats and the litigious nature of rights holders together have all made it much tougher for smaller films.”

Andrew Fierberg, a producer on Lodge Kerrigan’s Keane, which shot on location in the Port Authority Bus Terminal, and the upcoming Diane Arbus biopic Fur, starring Nicole Kidman, acknowledges the difficulties of delivering pictures, small and large, to the mini-majors, which can add up to $150,000 (or more, especially, with costly music clearances) to a producer’s costs.

“Most distributors are playing hardball,” he says. “[They are not] offering much of an advance, if any at all. They then give the filmmakers a delivery schedule developed to protect the distributor on [what is normally] a $20 million film.”

“These are very protracted negotiations now,” continues Fierberg, referring to the talks that occur between producers and a studio when a distribution deal is papered. “And it’s with the legal department. You’re not dealing with [Sony Pictures Classics co-president] Michael Barker or [ThinkFilm head] Mark Urman; it’s the guys in the back rooms who just want to make sure their asses are covered.”