Red State is New State of Filmmaking

A band of Alberta investors break free of the traditional Hollywood business model, relying on fan support to make sure Kevin Smith’s controversial film gets seen.

Photograph by Jerod Harris, Nhaelan McMillan

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

“It [Gretzky’s trade] was the beginning of the end of something,” said Smith after his film made its debut at the Eccles Theatre, 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 symbolism of 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 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. “I liked his personality. He seemed open and approachable. And I am a fan of his films,” he said. Plus, 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.

And Smith replied. As they 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 for just over $27,500, 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 of 2006 opened a new chapter in both McMillan 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.

After wrapping up the Bear Nation shoot, McMillan received the script for Red State in December 2009. Smith introduced McMillan to Jon Gordon, a producer with credits in 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 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.

“From day one, this film appealed to me,” said 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 board.

“When I learned Kevin was going to be shooting a horror picture, I became very intrigued,” Choy said in a later interview. He was provided a copy of the script and couldn’t put it down. “That sealed my interest in wanting to be involved.”

Sarath Samarasekera, CEO of Calgary’s e-commerce site, came in and helped 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 are 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. The filmmakers were concerned that the government might freeze tax-credit payouts to help budget the state.

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

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 Statewas made to scare people. 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 the good guys versus the 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.

Red State is an unsettling, polarizing film, largely because there are no clear good guys. (Three months after the opening at Sundance, 781 viewers logged on to the Internet Movie Database to share their opinions. Of those, 404 rated the movie a perfect 10 and 107 gave it a 1.)

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 against the “sins” of gay people at the funerals of U.S. soldiers returning from the Middle East. 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 anyone involved with the movie – including death threats posted on IMDB.

Red State paints an interesting insight into what U.S. religious culture is like,” said 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.”

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 confirmed his suspicions, the iPad writer talked about the coming confrontation between Westboro and the filmmakers with anticipation worthy of 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 they 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 Malcolm 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 ink crudely slapped on cardboard; these were slick placards. 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.

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.” Other signs from Team Red State included “God Hates Fat” and “Thor Hates Straights.”

“They need to see the film before they create their opinions,” said McMillan of the Westboro group. “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.”

Choy, who didn’t make the trip to Utah, said controversy is relative. “The subject matter of Red State encourages dialogue and discussion of numerous topics that people are very passionate about. The intense feelings that people have for both religion and their country can cause certain people to take very emotional stands.”

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 meals.It buys the ads and makes sure the posters look slick.

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 City; he went through 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 Pictures, Smith’s indie company, hopes to raise the money for a full worldwide theatrical release Oct. 19.

The film’s Radio City Music Hall opening grossed just over US$160,000. Attendance was pegged at 3,800. As of April 10, a month into the tour, the movie had grossed US$851,832.

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 the fourth day 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 said.

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,” said 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.”

Gordon pointed out that 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.”

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. A movie needs to make $50 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 flop, 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, be willing to pay to download the films.

“I have seen all of Kevin’s movies, but I have never seen any one of them except for Cop Out in the theatres,” said 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 said. “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 for traditional media forms – print advertising, billboards – and by using Internet buzz as the main selling tool, Samarasekera believes Red State is chopping a lot of the spending fat that the studios haven’t been able to so far.

While there is no getting around the number of times Smith says “my film” when talking about Red State at Sundance, he said the investors will get paid.

“It’s a big enough hurdle to find money to make the movie, and then, when it’s all said and done [that’s nothing] because the model came from the studios,” said Smith at the Eccles opening.

“Selling my film is akin to having a baby and handing it over to someone else to raise … I came here 17 years ago to sell my movie. I can’t think of anything fucking worse 17 years later than selling our movies to people who just don’t fucking get it,” Smith continued.

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. The question is: Is Kevin 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 said. “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.”

“I have found that the film business isn’t much different than the other entertainment ventures I have been involved with over the years,” said Choy. “Just like opening clubs and promoting bands, it’s all about picking a winner and putting everything you have into it to help ensure it’s a success.”

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