Magazine article Variety

Annapurna's Risky Biz Isn't Paying Off

Magazine article Variety

Annapurna's Risky Biz Isn't Paying Off

Article excerpt

A throng OF Hollywood elite in a tent on the freezing beach gave a standing ovation when "If Beale Street Could Talk" won the best feature prize at the Independent Spirit Awards in February.

Barry Jenkins also took directing honors for the film, an adaptation of James Baldwin's classic novel that was produced by Annapurna and Plan B.

Looking over the rows of boldface names, including Timothée Chalamet and Glenn Close, Jenkins singled out his absent benefactor, who was at home stricken with the flu: "Megan Ellison!" he exclaimed. "Financiers do not put their money behind black authors. Thank you for your money, my dear. James Baldwin thanks you."

Jenkins is not alone in heaping praise on Ellison, who is known in the creative community as someone who consistently backs auteur directors, among them Paul Thomas Anderson, Spike Jonze and David O. Russell, making sizable investments in risky movies that major studios frequently shun.

But many industry observers and insiders are hesitant to spray champagne for Annapurna Pictures, whose shaky financial health gets overshadowed by all the accolades.

With most of its awards hopefuls fetching zero trophies this season, the company is now reaping significant losses and looking to a future reliant on a joint distribution deal with MGM, rebranded in February as United Artists Releasing.

Take "Beale Street." Ellison is looking at a write-down of between $8 million and $10 million on a movie that was critically beloved but little seen, an individual familiar with the release told Variety. Compounding the situation is "Vice," Ellison's other big awards bet that cost around $65 million and scored eight Oscar nominations, including one for Christian Bale's turn as Dick Cheney. Industry figures estimate that "Vice" will lose $20 million, though an individual familiar with Annapurna pegged the number at closer to $15 million. Nicole Kidman's compelling but hit-and-miss cop drama "Destroyer" grossed only $1.5 million domestically and will represent a $7 million loss, another insider said.

These numbers are par for the course at Annapurna. Since 2016, when the company moved into distributing and marketing its movies as opposed to strictly producing them, it has endured major financial setbacks under a strategy to pridefully spend what it takes to get visionaries seen and heard. Of the eight films it has released since 2017, only one, "Sorry to Bother You," is expected to be minimally profitable, another insider said.

The company declined to make Ellison or other executives available for interview for this story.

Annapurna is the latest in a long line of indie studios whose grand ambitions have collided with the brutal economic realities of the business. Moviemaking is capital intensive and risky, and the history of Hollywood is littered with the corpses of disruptive studios that collapsed when the hits dried up. Relativity Studios, Broad Green Entertainment and Global Road are just a few of the recent players to have flamed out. Given Ellison's family money Annapurna has had much more of a financial cushion than other indies. Her brother, David Ellison, enjoys the same luxury with his company Skydance Media. But their billionaire father, Larry Ellison, has made it clear that he's tired of Annapurna losing money and has brought in financial advisers to help guide his daughter.

"If you're going to do what Annapurna wants to do, you have to hit every time," says Jeff Bock, senior box office analyst at Exhibitor Relations. …

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