The first deal of the XXXI International Film Festival in Toronto, which opened on September 7, was the purchase by Metro Goldwin Mayer (MGM) of the North American rights to distribute German director Werner Herzog's film Rescue Dawn. The film is financed 50:50 by the Luxembourg subsidiary of the Russian company Sistema Mass Media, Thema Production, and the American production company Gibraltar Films. According to a source close to the deal, MGM paid more than $10 million for the rights to the film.

The “daughter” of “Sistema” expected not only to return the invested funds (more than $4 million), but also to receive 30% of the proceeds from the film’s distribution. “I hope that we have already received our investments plus 30% of the [expected] proceeds [after the deal with MGM],” notes SMM CEO Mikhail Dunayev. Now CMM also expects to receive profits from the film’s worldwide distribution.

“This is the first time that a major studio (one of the largest in Hollywood – Vedomosti) has bought a film that was half-financed by a Russian company,” Dunayev notes. Vladimir Kilburg, producer of the films “Sdvig” and “Antikiller 2,” calls this a precedent in the domestic film market. “This is a breakthrough,” he says. Georgy Malkov, vice president of marketing at Central Partnership, is more skeptical and believes that the success of one film will have little impact on the industry as a whole. “New investors are unlikely to come running to us and say that they want to make films,” he says. Olga Nechaeva, sales and marketing manager for Sony Pictures Home Entertainment in Russia and the CIS, does not see anything revolutionary in the deal either. “There have already been precedents when major studios bought the rights to Russian films,” she notes. In particular, the rights for the worldwide distribution of Night Watch and Day Watch were sold by Channel One to Fox Searchlight (part of 20th Century Fox) for $4 million. But for wide distribution (not as part of the distribution of foreign films), films shot with Russian money have not yet been bought by majors, Dunayev asserts. MGM is releasing Rescue Dawn in 1,600 copies.

Rescue Dawn tells the story of U.S. Air Force pilot Dieter Dengler, who was shot down over Laos during the Vietnam War. According to Variety, MGM is planning to push Herzog's film for an Academy Award in 2007. According to Colby College research, a Best Picture Oscar nomination alone brings in an additional $4.8 million at the box office, while a win brings in another $12.7 million. MGM is planning to release Rescue Dawn in December 2006.

"The System" is expecting an "Oscar"