EuropaCorp Exploring Cost-Cutting, Possible Closure of Distribution Arm
The embattled French company is scrambling to secure new financial backing as its stock plunges amid sexual misconduct allegations against founder Luc Besson.
EuropaCorp is in full crisis mode.
The French studio on Thursday confirmed to The Hollywood Reporter that it is looking to cut costs, particular at its French distribution arm, and is exploring several options, including a partial or complete shuttering of the division.
The news comes as EuropaCorp stock is in free fall and filmmaker Luc Besson, who is the company's founder and lead shareholder, is facing charges of sexual assault in France.
"EuropaCorp is working to continue reducing its overhead. In this context, EuropaCorp is analyzing the best solution for distributing films and at the same time reducing its overhead costs,” a company spokesman told THR. “At this stage, no option is preferred. Nothing has been decided."
EuropaCorp is coming off a horrible year, which began with the costly flop that was Besson's Valerian and the City of a Thousand Planets in 2017. The sci-fi epic, budgeted at $180 million to $200 million, grossed just $225 million worldwide, well below forecasts. The company has since been drowning in red ink, posting a €119 million ($135 million) loss last December and a €82.5 million ($93.4 million) loss in July.
Things got worse for EuropaCorp in May of this year when Belgian actress Sand Van Roy accused Besson of raping her, sparking a police investigation. On Nov. 28, five more woman came forward in a report in French investigative magazine Mediapart, alleging sexual misconduct. In total, nine separate woman have accused the director of sexual assault and harassment.
The company is now scrambling to reorganize and secure additional financing. A source near EuropaCorp said the group was exploring all options for its distribution business, including collaborating with other companies to co-distribute its titles in France or outsourcing distribution entirely.
EuropaCorp has pushed back its two big 2019 releases as it tries to figure out its new strategy. The Besson-directed action thriller Anna, starring Helen Mirren and Sasha Luss, was moved from a planned Jan. 2 bow to a March 27 opening in France. Lionsgate, which has U.S. rights to Anna, has not yet set a domestic release date for the film.
Guillaume Canet’s Nous finirons ensemble — the sequel to his 2010 French box office smash Little White Lies — was pushed back from a planned March 27 release to May 1. EuropaCorp is believed to be in talks with French distributor Pathe to take both films for local release.
EuropaCorp’s French distribution division is a major part of the company, taking in €39.6 million ($44.7 million) over the last fiscal year, representing nearly 18 percent of the company's total revenue. France has always been a big part of its model because its production side has delivered some of the country’s most ambitious films, at least in terms of budget, including Besson’s Valerian.
But the company, which used to release around 10 films a year, has shrunk considerably, dropping to just two to three releases per year. Currently, EuropaCorp has no movies in production.
EuropaCorp has already held a fire sale of several of its assets as it looks to slim down and repay debts of some $260 million. It sold off its French TV division for $13 million and is in talks with French studio Gaumont for the Roissy Films library, which comprises some 500 titles.
A final decision on EuropaCorp's distribution business is unlikely to come before the company announces its financial results at its annual shareholders meeting on Dec. 14.