May 13 (Bloomberg) -- The Cannes Film Festival opening today looks less like “The Great Gatsby” and more like “Risky Business” as 4,000 independent movies vie for the attention of a shrinking cast of distributors.

Advance bookings suggest attendance at the world’s largest film festival will be down about 15 percent, complicating moviemakers’ efforts to find distributors. The number of films at Cannes, known for celebrity sightings and yacht parties, is roughly the same as a year ago, organizers say.

The number of films reflects production financing available in previous years. Now, a lack of capital is squeezing everyone from distributors like those looking to buy movies at Cannes to filmmakers including Steven Spielberg, who is trying to raise money for his newly independent DreamWorks studio.

“It’s very tough out there,” said Jerome Paillard, director of the Cannes Marche du Film, the independent film market that runs parallel to the festival. “The credit crunch is really a problem for distributors with no strong cash flow and who rely on credit lines to buy films.”

Time Warner Inc. said last month it had to absorb $120 million in costs because film finance partner Village Roadshow Pictures couldn’t obtain funds. Village Roadshow said this week it restructured a bank credit line, freeing money to cover its share of 2008 productions. In February, Lions Gate Entertainment Corp. said Pride Pictures LLC won’t participate in three films.

Heath Ledger Film

This year’s screenings include the late Heath Ledger’s final film, “The Imaginarium of Doctor Parnassus,” directed by Terry Gilliam, and Ken Loach’s “Looking for Eric,” which stars soccer legend Eric Cantona. Filmmakers Quentin Tarantino, Ang Lee and Pedro Almodovar are showing works.

Movies with early buzz include Jane Campion’s “Bright Star,” about the romance between 19th century poet John Keats and Fanny Brawne, said Michael Schaefer, senior vice president of acquisitions at Summit Entertainment, an independent producer and distributor based in Santa Monica, California.

The festival begins with “Up,” the 3-D feature from Walt Disney Co.’s Pixar, the first animated film to open Cannes.

With less money in the pockets of distributors, producers have lowered their budgets. The cost to make the average movie in the Marche du Film has declined about 20 percent to $5.2 million this year, Paillard said.

The falling costs also reflect the glut of movies now coming to market, said Stephen Margolis, the head of Future Films, a financier and producer based in London.

“Some films will not see the light of day,” Margolis said. “Banks are beginning to leave the sector.”

Film Budgets

Not everyone is coming with less money.

Revolver Entertainment, a London-based distributor, is holding its acquisition budget steady this year, said Managing Director Justin Marciano. The company has released movies including “Tell No One,” the French film featuring Francois Cluzet and Kristin Scott-Thomas, and Charlie Kaufman’s “Synecdoche, New York.”

“There will be some good films that don’t make it and from our buying perspective at the moment, the state of the economy obviously has an impact,” Marciano said. “It’s super tough for producers at the moment and there will be fewer films made.”

The backlog of movies “hurts the marketplace,” said Michael Cerenzie of Cerenzie-Peters Productions, an independent producer in Los Angeles. “We’re still another year away from getting through this saturation.”

Cerenzie’s production credits include “Before the Devil Knows You’re Dead,” starring Philip Seymour Hoffman, and “Den of Lions.”

State Financing

Unlike the U.S., state-owned companies provide significant financing for Europe’s film industry.

U.K. government-owned Channel Four Television Corp.’s Film4, which helped produce “Slumdog Millionaire,” has cut 15 percent of staff and is urging a tie-up with the British Broadcasting Corp.’s commercial arm.

Film4 helped finance “In Bruges,” “The Last King of Scotland,” “The Road to Guantanamo” and “Hunger,” which took home last year’s Camera d’Or in Cannes.

Less public funding means movies like “Fish Tank,” a contender for the Palm d’Or in Cannes this year, won’t be made, said Paul Trijbits, the producer. Film funding from U.K. national lottery proceeds has already been cut by 10 percent to 20 percent, he said.

Andrea Arnold, the writer of “Fish Tank,” was discovered with her first film, “Red Road,” after it was made with public money in the U.K.

Undiscovered

“She was a big risk and someone invested in her,” Trijbits said. “It will undoubtedly be difficult to find a new Andrea Arnold.”

Production budgets have come down by as much as 30 percent, said Luc Roeg, an independent producer who is seeking distribution for several films.

“You have to be much more price aware and try and show distributors as much as possible where the success in the film is,” said Roeg, whose father Nicolas directed the British films “Walkabout” and “Don’t Look Now.”

Sony Pictures Classics, the Sony Corp. unit that focuses on independent films, is coming to Cannes with its usual three- person contingent, said co-President Tom Bernard, who has attended the festival for more than three decades.

The company announced two acquisitions today, “The White Ribbon,” from German director Michael Haneke, and “Coco Chanel & Igor Stravinsky,” a French drama based on the book “Coco and Igor” by Chris Greenhalgh.

Bernard said he is facing no pressure to spend less and has little time for the yacht parties and press lines that captivate the public. His days are filled with screenings that start at 8 a.m., end after 10 p.m. and are punctuated with negotiations that can last through the night.

“It’s like my own personal Abu Ghraib,” Bernard said. “You’re working more hours than you’d work in a regular day. You’re seeing a lot of movies that aren’t very good, but you have to see them because you don’t know.”

To contact the reporter on this story: Kristen Schweizer in London at kschweizer1@bloomberg.net

Last Updated: May 13, 2009 16:21 EDT