Why Luc Besson's 'Valerian' May Determine the Fate of Europe's Most High-Profile Studio

Courtesy of Domitille Girard/Europacorp

The $200 million sci-fi epic has analysts worried that a flop could torpedo his storied EuropaCorp, even as a new pact with STX provides breathing room (and an escape from troubled Relativity Media) for now.

Can a single movie determine the future of an entire studio? Such is perhaps the case with filmmaker Luc Besson's Valerian and the City of a Thousand Planets, an ambitious $200 million sci-fi epic set for release this summer. The film already has prompted Besson's EuropaCorp — one of Europe's largest and most influential entertainment companies — to make major changes.

EuropaCorp long has been considered one of a handful of successful European studios thanks to the Taken and Transporter franchises as well as the 2014 Scarlett Johansson vehicle Lucy. But its fortunes have soured in recent years, and Besson, 57, who founded the company in 1996 and owns 44 percent of it, recently was dogged by speculation he was seeking to sell his stake. Valerian — the most expensive movie ever made by a non-U.S. studio — is seen by analysts as a monumental risk. There even were reports in Paris, near where EuropaCorp is based, that the company had hired investment bank Moelis & Co. to hunt for buyers.

Then on Jan. 3, Besson revealed a lifeline of sorts. EuropaCorp announced it had signed a three-year distribution and marketing pact with U.S.-based STX Motion Pictures, taking Valerian away from RED — the joint venture EuropaCorp had formed with Ryan Kavanaugh's troubled Relativity Media — and reassuring investors its film slate will make it into theaters. But EuropaCorp now must share revenue from Valerian (and other films), limiting its ability to make back such a hefty investment.

EuropaCorp is "afraid the current situation at RED might not improve in time [for Valerian's release]" given the trouble at Relativity, noted Natixis analyst Pavel Govciyan. "They do not want to take any risks on Valerian, which is absolutely key for them."

The STX deal also puts Valerian, which stars Dane DeHaan, Cara Delevingne, Clive Owen and Rihanna, into the hands of two friends: EuropaCorp CEO Marc Shmuger and STX chairman Adam Fogelson. Both are former Universal studio chiefs and have worked together extensively. With STX taking on some or all of the marketing and distribution costs (it's unclear who is paying how much) and EuropaCorp helping finance the film with presales and tax subsidies from the French government, the financial risk is tempered somewhat.

Still, EuropaCorp actively was seeking capital in 2016 — via either a possible buyer (rumored to be Vivendi at the time) or a major cash infusion. The company was able to stave off any financial upheaval after Besson made several big deals to shore up funds. China's Fundamental Group bought a 28 percent stake in EuropaCorp for $67 million; Vine Alternative Investments agreed to a $30 million credit line; and EuropaCorp sold its multiplex business to French cinema chain Gaumont for an estimated $21.2 million.

Valerian's success not only would be a financial lifeline but essential if EuropaCorp is to continue to attract top actors for its projects. Unlike many non-American studios that struggle to lure English-speaking talent, EuropaCorp has upcoming movies including The Circle, starring Tom Hanks, Emma Watson and John Boyega; Lone Scherfig's Their Finest, with Gemma Arterton and Sam Claflin; and Renegades, a heist adventure starring Sullivan Stapleton and J.K. Simmons.

"If they succeed with Valerian, they will secure big names for the coming years," says Govciyan.

But many are skeptical of its prospects. EuropaCorp's stock is down about 17 percent in the past year amid a lack of hits, financial struggles and uncertainty over Valerian. Yet analysts believe the stock price — and EuropaCorp's $162 million market value in early January — could soar if buzz on Valerian improves ahead of its release. Nobody, though, is counting on the kind of profitability seen with Lucy, which had a budget of $40 million and took in some $460 million globally.

For Besson, who declined to comment, making Valerian a hit would be a happy ending to a lifelong love story. The filmmaker has said he discovered the comics on which Valerian is based as a 10-year-old, with heroine Laureline (played in the film by Delevingne) the first woman with whom he fell in love. The initial footage shown at Comic-Con was regarded as stunning.

Besson keenly is aware that his first space epic, 1997's The Fifth Element, starring Bruce Willis and Milla Jovovich, was not an immediate hit but gained a following and became a sci-fi classic.

Decades later, he doesn't have that luxury of time. For EuropaCorp's future to be assured, Valerian needs to perform in theaters worldwide. To that end, Besson hopes audiences have caught up to his sensibilities. "Twenty years ago I was [considered] weird," he told an audience at 2016's Comic-Con. "And 20 years later, the world has gotten as weird as me."

Georg Szalai contributed to this report.

This story first appeared in the Jan. 20 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.

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