Senator, X Filme mend fences

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COLOGNE, Germany -- After years of legal jockeying, Berlin-based indie players Senator Entertainment AG and X Filme Creative Pool reached an agreement Friday that will see Senator stay on as a majority shareholder in X Filme but see both companies continue to produce and distribute films independently.

Senator and X Filme have been at loggerheads for more than two years, ever since Senator filed for insolvency protection in April 2004. Senator originally acquired a majority stake in X Filme in 2000 at the peak of Germany's media-driven stock market boom.

When the boom turned to bust, X Filme founders -- directing trio Tom Tykwer ("Run Lola Run"), Wolfgang Becker ("Goodbye, Lenin!") and Dani Levy ("Go For Zucker!"), along with producer Stefan Ardnt -- tried to take back control from Senator.

But the companies couldn't agree on terms. Things came to a head earlier this year when Tykwer, Becker and Levy set up a rival production shingle, Y Filme, to produce Levy's controversial Hitler comedy "Mein Fuhrer," keeping the film away from Senator.

But on Friday, the heads of Senator and X Filme announced they had settled their differences and signed a deal to continue their cooperation.

Under the agreement, Senator will remain majority shareholder in X Filme, but X Filme will maintain its independence.

"In the end, it was of course all about money," X Filme managing director Stefan Arndt said in an interview. "Senator's main interest is that X Filme make as much money as possible. Our goal is a different one: to make the best films we can. But we have reached an agreement, which provides a legal framework for all future eventualities. In a few years, we can re-assess the situation and see if it still makes sense for all involved."

Senator board member Marco Weber called the agreement "a good deal for both companies." He said Senator and X Filme will look at possible synergies but added that X Filme will remain "completely independent" in the financing, production and distribution of its films.

While Senator and X Filme will officially remain competitors, the two companies have starkly divergent production profiles, making direct competition unlikely. X Filme's director-driven productions are solidly in the art house world while Senator's in-house features aim at a more mainstream market.

Similarly, while Senator has been aggressively buying up German rights to such international features as "Paris, je t'aime," Pan's Labyrinth" and "Fast Food Nation," X Filme's distribution arm, X Verleih, tends to release mainly German-language films.

"X Filme has their business plan and we have ours," Weber said. "I don't see us coming into conflict at all. X Filme are the best filmmakers in Germany and we're happy that we are still in business with them."



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