Alberta Investors Help Kevin Smith Release New Movie

As Kevin Smith addressed a sellout crowd of 1,270 after the world premiere of his controversial new film, Red State, at the 2011 Sundance Film Festival, he held a lucky talisman in his hand: a hockey stick.

More specifically, the white Titan hockey stick Wayne Gretzky used in his final Stanley Cup-winning season with the Edmonton Oilers.   

“[Gretzky’s trade from the Edmonton Oilers to the Los Angeles Kings] was the beginning of the end of something,” said Smith after his film made its debut at the Eccles Theater, the festival’s largest venue. And then he quoted Walter Gretzky, the most famous hockey dad of all time: “Don’t go where the puck’s been; go where it is going to be.”

The stick was fitting, not only because Red State represents a massive shift away from the college-boy comedies we’re used to seeing from Smith, from Clerks and Mallrats, to Chasing Amy and Jay and Silent Bob Strike Back, but also because Alberta has become so integral to his success. The bulk of the US$4 million Smith required to film his controversial thriller about a fundamentalist Christian sect gone horribly wrong came from Calgary and Edmonton.

Smith and his partners also hope they have gone where the puck is going by walking away from the traditional Hollywood system of marketing films, making Red State both an artistic and a business risk.



The Alberta connection
Red State’s executive producers, Nhaelan McMillan and Harvey Cohen, are partners in The Union Ltd., one of the largest independent concert promoters in the country. McMillan is based in Edmonton and Cohen in Calgary.
    
“Film was something I always wanted to do,” McMillan said during the flight down to Sundance. “I went to film school. I had two paths to choose from: film or music. Music prevailed; film went to the back burner.”

Seven years ago, still dreaming of writing his own screenplay, McMillan thought he’d try to pick Smith’s brain. After years of promoting rock bands, any sense of awe about celebrities had been completely eradicated for McMillan. “It was back when you could find Kevin’s e-mail online,” he said.


Movie executive producer Nhaelan McMillan

And Smith replied. As McMillan and Smith exchanged e-mails, McMillan realized he also had a business opportunity at hand. Smith had been doing a series of lectures at universities throughout the U.S. and his cult films had made him a hero to film students and college kids around the continent — after all, this is the man who made his first film, Clerks, for just over $27,575, paid for by maxing his credit cards and selling his comic book collection. Smith, who is well known for telling long, expletive-ridden personal stories, could be on stage for more than four hours at a time.

McMillan proposed that Smith take his act out of the universities and refine his monologues into easier-to-digest two-hour sets. Aimed at theatres and more mainstream audiences, The Union and Smith found a hit. Sold-out shows in Calgary and Edmonton in February 2006 opened a new chapter in both McMillan’s and Smith’s careers.

McMillan and Cohen’s first outing as movie executive producers was on Canadian filmmaker Malcolm Ingram’s Bear Nation, a documentary on a small section of gay males who have fetishes for overweight, hirsute men.

Just before promoting Bear Nation, McMillan received the script for Red State in December 2009. Smith introduced McMillan to Jon Gordon, a producer with credits including Good Will Hunting and The Adjustment Bureau, who started working with Smith during their time together at Miramax. At first, they discussed promotional opportunities; how could The Union Ltd. and the filmmakers work together to get the word out about the new film?

The discussion soon went from how McMillan could help promote the new film, to how he and other investors could help make the new film. He jumped at the chance, and Cohen also came in.


Movie executive producer Harvey Cohen

“From day one, this film appealed to me,” says McMillan during a recent interview back in Edmonton. “I’ve always felt that Kevin was ready to do something outside of comedy. When I first saw the film, it gave me the same feeling I got when I first saw The Texas Chainsaw Massacre as a kid.”

Calgary nightclub owner Victor Choy, who McMillan and Cohen knew through the music business, also came on as an executive producer, along with Sarath Samarasekera, CEO of Calgary’s shopster.com. Samarasekera was actually the one to finalize the deal.

“He has a very strong business background,” says McMillan. “Getting him on board to help negotiate with Jon and Kevin was important, because Sarath sees the world in black and white.”

Unlike McMillan, Samarasekera’s involvement wasn’t spurred by his love of film. “I tend to like movies that everyone else thinks are terrible, and I tend to fall asleep during films everyone else calls classics,” he says. “Really, I got interested based on the recommendations of two people [Cohen and McMillan] who I trusted. They thought it was a good project.

“But it was a lot more work than I had anticipated. Hollywood has its own economy and its own nuances, so making a movie is a very complicated process. The major difference between Hollywood and a traditional business is that you are investing in a concept, with no prototype. You have to make your money on the final product, whether it’s good or bad.”

The business of filmmaking is a complicated dance. There are guilds and unions that filmmakers don’t dare go around. Depending on the state or province of production, there may be tax credits available, but these don’t get paid until after the movie is finished. The investors have to finance those areas up-front and then wait to be reimbursed by the government. Red State was filmed in California and, as the cameras rolled, news broke that the state might go bankrupt. If that happened, it could have frozen tax-credit payouts.

“Definitely, with all of us in Alberta, without being in the heart of the industry, it made it difficult,” says Samarasekera.

Despite the fact Alberta investors had to familiarize themselves with the complexities of California tax law, Gordon felt they were the perfect fit for the film. What Gordon and Smith needed were investors who, in their own businesses, had a history of taking chances and being innovative. Union has managed to attract top talent for its shows, including Franz Ferdinand and Weezer, despite the consolidation of the concert business by the two major American players, Live Nation and AEG. With Shopster, Samarasekera advises clients on how to move away from traditional and unprofitable ways of doing business.

“The thing with our northern financiers is that they are all very like-minded,” says Gordon. “They are all open to approaching things a little bit differently.
“What made them so perfect for this movie is that they aren’t bogged down in the way movies were done before. They are businessmen who have been successful in their own fields because they think outside of the box.”


Movie executive producer Sarath Samarasekera

Smith’s first horror film
Not only was Red State going to be a departure from the studio model, it was a major departure from Smith’s previous films.

Smith established his fan base by writing and directing comedies like Clerks and Mallrats. Along the way, he ventured into more thoughtful fare, including Dogma, his 1999 film about two fallen angels trying to re-enter Heaven and the last living relative of Jesus who is assigned by God to stop them. And while it may be the closest of Smith’s previous work in theme to Red State, at its core is a very important difference: Dogma was made to make people laugh, while Red State is a violent horror movie. If the world of filmmaking was a poker game, Dogma would have been an artistic raise, while Red State sees Smith going all in.

Red State follows a group of Christian fundamentalists who abduct, torture and murder those they see as deviants, from homosexuals to teens who experiment with group sex. But it’s not a straightforward case of good guys versus bad guys. The government agents are portrayed as incompetent, shoot-first yahoos who think justice comes from the end of a gun — and aren’t interested in taking prisoners.

The fact there’s no clear good guys, that the shootout is bloody and brutal, the scenes of torture graphic, make Red State an unsettling, polarizing film. (One week after the opening at Sundance, 189 viewers logged on to the Internet Movie Database (IMDb) to share their opinions. Of those, 121 rated the movie a perfect 10 and 37 gave it a one.)

The film draws inspiration for its antagonist from the controversial Westboro Baptist Church, run by Kansas preacher Fred Phelps. The church has become a headline-maker for demonstrating at the funerals of U.S. soldiers returning from the Middle East and those of gay men. Their reasoning? That, somehow, the dead brought tragedy on themselves by angering God, either by being gay or by serving in an army that protects the rights of homosexuals.

The film also takes plot points from the 1993 Waco, Texas, shootout between American law enforcement and members of David Koresh’s Branch Davidian church.

As soon as news hit the tabloids that Smith was making a horror film with a right-wing religious group at its centre, the Alberta investors were pulled into controversy.

Internet message boards were filled with vitriolic posts promising fire and brimstone to any involved with the movie — including death threats posted on IMDb.

“Red State paints an interesting insight into what U.S. religious culture is like,” says McMillan. “We talk about the crazy fundamentalists that live in the Middle East, but not the ones in our own backyard. It portrays where America is going. It’s a matter of time. The country is so in debt. So, there are so many right-wing fundamentalists who are arming themselves, waiting for this, for the end. They want this shit to happen.”


Stills from Smith’s Red State trailer have been a large part of building Internet buzz for the film.

Showdown at Sundance
For the film’s debut at Sundance on January 23, 2011, Cohen and McMillan joined Smith, Gordon and cast members in Utah. McMillan had also invited me to be part of the film’s entourage at the world’s biggest indie film festival.

By the opening day of Sundance, Westboro had announced plans to protest the film’s opening. About a dozen members of the church were scheduled to arrive in Park City to picket outside the Eccles Theater. On the night McMillan and I arrived, a journalist with a Sundance badge, claiming to be from a yet-to-be-published iPad-based magazine, asked us if we were from Red State. When McMillan admitted he was with the film, the iPad writer talked about the coming confrontation between Westboro and the filmmakers with the same kind of anticipation as a massive sporting event. In his eyes, this Super Bowl of ideology would be the highlight of the festival.

The night before Red State’s debut, Smith, the cast and the investors enjoyed dinner at Park City’s exclusive Stein Eriksen Lodge, a resort nestled in the dark mountains outside of the city centre. Jokes flew about the coming protest and about who was going to take the first bullet for the movie.

Instead of avoiding Westboro, Smith and Gordon realized there was an opportunity to turn the protest into a massive PR boost for the film. Smith had pulled this kind of stunt before. In 1999, on the first weekend of theatrical release of Dogma, a group of angry Catholics marched outside of a multiplex in Eatontown, New Jersey. That multiplex was close to where Smith lived at the time; so, he showed up and joined their protest. He didn’t counter-protest, he simply joined in and played the part of those trying to censor him.

The Sundance protest would up the ante. Unlike Dogma, Smith would be meeting his detractors head-on. And he would be doing so at the world premiere of the film, not during a North American opening weekend at a random chain cinema house.

After Smith arrived in a tour bus, he and his entourage, which included Gordon and Ingram, planned to come out holding their own protest signs.

On the night of the premiere, about a dozen Westboro members and supporters arrived on cue, carrying signs like “Red State Fags,” “Fags Doom Nations” and “God Hates Your Idols.” These weren’t the kind of signs you normally see at protests, with paint or markers crudely slapped on cardboard; these were slick placards, carrying the same messages displayed at previous Westboro protests, though Smith noted the signs specifically targeting Red State were a nice touch.

They sang “God bless America, land of the fag” and chanted, “God hates fags, God hates Red State, God hates the Sundance Film Festival, God hates Kevin Smith.”

The cameras from Associated Press, major TV networks and Reuters were clearly marked; Cohen realized the movie was going to be on the front pages of a lot of entertainment sections across North America.

“They need to see the film before they create their opinions,” said McMillan of the Westboro group at Sundance. “Right now, their opinions are more fanatical than they are educated. But they’re not going to see it. They’re going to boycott it, anyway. I think it’s good press for the film.”

When Smith’s bus arrived, he went towards the Westboro protesters with his cadre, carrying their own series of expletive-laced signs. Gordon held up a placard reading “I’m a happy Jew.”

Sundance decided the best way to deal with the protesters was to be nice to them.

“Welcome to protest and excitement, and the last paradise of free speech,” said John Cooper, Sundance’s director, before the curtains rose for Red State’s unveiling at the Eccles Theater.


Stills from Smith’s Red State trailer have been a large part of building Internet buzz for the film.

The new distribution model
During Sundance, press release after press release is written about the latest indie director to sell his or her film to a major studio. Once the studio buys the film, it assigns a promotional and distribution budget to the film. The studio makes sure the movie gets into the big theatres and the shopping-mall multiplexes. It creates merchandising opportunities, from soundtrack spinoffs to action figures in fast-food chain meals. It buys the ads and makes sure the posters look slick. It’s the way business is done.

Indie filmmakers usually beg and plead to get major studio execs to see their films; the highlights of Sundance are the films that are purchased by the big boys. But, after showing Red State — and with many major studio execs in the audience — Smith and Gordon held a mock auction, where Smith bought the rights to the film for $20.

Smith then announced a Red State tour, which kicked off March 5 in New York; he went through a number of American cities, hoping his fan base would pay six times more than an average movie ticket to see a special showing of the film, along with a talk from Smith. From these performances, Smodcast Films, Smith’s indie company, hopes to raise the money for a full worldwide theatrical release on Oct. 19.

While this plan wasn’t a surprise to those in Smith’s inner circle, it stunned those in an audience filled with studio executives.

For Smith to not only pull the film back, but to hold the mock auction, was more than a snub; it was Smith holding his middle finger up to Hollywood. Choosing to promote the film themselves, to use Twitter and other social-media platforms to reach fans rather than buy ads in Variety, is a new business model — one which Smith hatched on day four of filming.

At first, Gordon rejected the notion. Then he reconsidered. “After thinking about it for a weekend, I thought, of course this the way we should do this,” he says.
As Walter Gretzky would say, Smith and his investors are trying to go where the puck is going to be.

“Control of the film gives you control of all the dollars coming in,” says McMillan. “We were never going to sell the film in that auction. I had heard Kevin rehearse the speech in his home; it seemed to me he knew exactly what he wanted to do. We were all on board with that. The entertainment business is changing. More money has to go back to the artist.”

Gordon says had the Alberta investors not been open to being part of a film that challenged the studio model, it would have been a lot more nerve-racking to take this plunge: “I think that, for financiers from a more traditional movie financing background, doing anything other than selling it to a studio would have been a very scary thing to do,” he says.

But why not use the hot-buzz of Sundance as a vehicle to sell the movie to a studio and its distribution machinery?

According to Smith, even a low-budget film becomes a big Hollywood picture once the studio gets involved. If a studio buys Red State for $6 million, it will then spend what Smith, on opening night, called the “Lionsgate $20 million,” a basic cheque for promotion, advertising and pushing the film. After that, a movie that cost $6 million to film needs to make $26 million to break even. And that doesn’t mean box-office receipts. Movie houses keep a large chunk of the revenue. In the end, a movie needs to make $51 million in box office in order to see the $26 million to get back to the studio.

In the era of home video and pay-per-view, box office is an outdated measure of a movie’s earning power, anyway. When Cop Out, Smith’s last studio film and a box office disappointment, was released on DVD and Blu-ray in late July 2010, it soared right to No. 1 on the sales charts, and has grossed more than US$13 million. Zack and Miri Make a Porno, another Smith box office disappointment, has raked in more than US$21 million in DVD sales. And that’s where McMillan and company see the profits coming from for Red State.

If the new film, with a US$4-million shooting budget, comes close to the DVD numbers achieved by Smith’s previous films, the profits will be significant. Since Smith’s fans are so loyal, they’ll buy the DVDs or, as Samarasekera expects, will be willing to pay to download the films. Smith is like a well-regarded indie band; even without radio airplay, the fans go to the record stores and buy the new release when it comes out.

“I have seen all of Kevin’s movies, but I have never seen any one of them except for Cop Out in the theatres,” says McMillan. “I saw it all on DVD. [Theatrical releases] are becoming advertisements to help generate DVD revenue.”

With legions of Internet fans and low start-up costs, Samarasekera thinks Smith can successfully change the film-distribution business model.

“Right now, big studios have a massive amount of expenses, because they are tied to traditional ways of doing business,” he says. “Where we are coming from is that there is no value in some of the old, standard ways of distribution.”

With no standard $20-million promo budget on traditional media forms — print advertising, billboards — and using Internet buzz as the main selling tool, Samarasekera believes Red State is chopping out a lot of fat that the studios haven’t been able to so far.

In Smith’s opening night speech, he bemoaned the additional financial burdens the traditional studio model puts on filmmakers.

“Selling my film is akin to having a baby and handing it over to someone else to raise,” said Smith to the full house at the Eccles opening. “I can’t think of anything worse than selling our movies to people who just don’t get it.”

While there is no getting around the fact Red State is going down a risky road, Smith said the investors will get paid. And, when he talked about the investors and the actors who took small cheques in order to make the film hit its budget, he referred back to the stick in his hand at Sundance.

 “I was assisted by a zillion Gretzkys on my crew,” he said. “When you’re passionate about something, everyone feels it and jumps in if they dig the project.”

But, while Smith played coy about his knowledge of the movie business, the people who backed him are confident they can recoup their investments, and then some. In the words of legendary Hollywood producer Harvey Weinstein, who mentored Gordon and Smith during their time with Miramax: “Never give up a good thing. Hold onto it yourself.”

The question is: is Smith still a sure thing? There is a large amount of financial risk involved in moving outside of the studio system, and only time will tell if the gamble pays off. Samarasekera, for one, is confident Smith has the cachet to self-promote a movie successfully and to make the new model work.

“People who follow Kevin Smith are more than simple Kevin Smith followers. These people are Internet-savvy,” he says. “There was a lot of rationalization done behind the scenes about going this route. This film can be a lot more profitable on a lot less.”