Jocks and Film Geeks Battle at Germany's Constantin

Constantin Film is the producer of the Milla Jovovich horror sci-fi franchise 'Resident Evil.'

Shareholders vote to spin off the film and TV business, but the producers of the 'Resident Evil' films reject the move and call for the resignation of CEO Fred Kogel.

At European mini-major Constantin Medien, a shareholder battle is underway that resembles a 1980s high-school comedy: jocks versus film geeks.

On the side of the jocks: Dieter Hahn, one of Constantin's major shareholders. He has long been pushing for the company to dump its film and TV business and focus on the sports side of the group, which includes Sport 1, a German ESPN-style TV channel, and TEAM, the Swiss-based group that handles the marketing rights for the UEFA Champions League, a European club soccer tournament.

On the side of the film geeks: Bernhard Burgener, a former Constantin Medien CEO and former head of Highlight Communications, the Swiss-based company that holds a 100 percent stake in Constantin's film and TV division, Constantin Film. Constantin Medien holds a majority stake in Highlight.

Constantin Film is one of Europe's leading producers and distributors, with homegrown hits like Fack Ju Gohte — recently remade as the Spanish-language No Manches Frida — and German distributor of U.S. features, including Girl on the Train, BFG and Dirty Grandpa. Internationally, it is best known for its long-running Resident Evil franchise, about to come to a close with Resident Evil: The Final Chapter, the sixth film in the series.

Burgener, a self-confessed film geek, has been the main force fighting Hahn and his plans to spin off Constantin's movie business. Both Hahn and Burgener have significant stakes in Constantin Medien (as of Nov. 2, Hahn held 10.5 percent of the company, Burgener 6.6 percent) and both have their own team in the form of shareholder group KF 15, which controls 18.1 percent of Constantin Medien and backs Hahn's sports-only focus, and Highlight Event and Entertainment, which holds 13.6 percent and support Burgener's film focus.

This week, the jocks at Constantin approved a proposal by management for a “strategic realignment” that aims to split off Constantin's film division and focus operations on its sports and event marketing businesses. After a two-day marathon meeting, a majority of shareholders voted to support the measure.

“Positioning ourselves as a sports-only company is in our estimation the best and most promising strategy for the Constantin Medien Group in the long term,ˮ said Constantin Medien CEO Fred Kogel in a statement. “It will give us the opportunity to increase the group’s return on sales and profitability permanently and sustainably.ˮ

But the film geeks are having none of it.

In a counter statement, Highlight Communications, the Swiss-based company that controls Constantin Film, rejected the shareholder vote, accusing Kogel's and Hahn's sports-only contingent of bad faith and suspicious maneuverings in the shareholder vote.

“Highlight Communications considers all resolutions of the annual general meeting of Constantin Medien to be null and void,” reads the statement, calling the vote illegitimate and alleging that “38.6 percent of the shareholder votes were arbitrarily excluded from the vote.”

Highlight said it will challenge the Constantin Medien vote and called for the immediate resignation of company CEO Kogel

“The relationship between Mr. Kogel and the entire Highlight group has been incurably damaged not least because of his behavior at the recent annual general meeting,” the Highlight statement read.

Martin Moszkowicz, executive chairman of Constantin Film, tells THR that the shareholder dispute would have no impact on day-to-day operations at the company or on any of its current or future productions. He said he expects the shareholder dispute with Constantin Medien and between Constantin and Highlight will continue for some time.