Luc Besson's EuropaCorp Posts $101 Million Loss
The latest financial report comes as the company is selling off assets in an effort to keep the studio financially afloat.
Luc Besson's EuropaCorp reported another steep loss of $101 million in the latest half-year results released Thursday.
The company attributed the loss to the poor performance of its films in the U.S., compared to the loss of $83.1 million it had posted in the comparable 2017 period. The latest numbers follow a series of financial blows to hit EuropaCorp after it reported a $95 million loss in July.
It has suffered a string of box office disappointments, most notably the underperformance of Besson's long-awaited Valerian and the City of a Thousand Planets. The sci-fi epic took in just $225 million at the global box office on a budget upwards of $180 million when it was released last July.
The loss was partially attributed to “a film not yet released and greenlighted in 2016, for an amount of €9.8 million ($11 million), to reflect the current revenue estimates." It's Helen Mirren-starrer Anna, which has been shelved by Lionsgate after Besson was put under investigation for a rape charge and faced additional sexual misconduct charges from nine women.
Besson is serving as interim CEO following the departure of Marc Shmuger last December, but the director is currently under police investigation stemming from a rape allegation filed in May by Belgian actress Sand Van Roy. Nine additional sexual misconduct and harassment allegations have come out in French media reports, putting the filmmaker under further pressure.
EuropaCorp has brought on French investment bank Messier Maris & Associates, headed by former Vivendi CEO Jean-Marie Messier, to find potential investment partners to help take on its massive debt.
The company's debt was reduced by a slight $10 million as it's been selling off assets in an attempt to stem the bleed. But it still has a hefty bill of $251 million waiting, with $136 million coming due next October and the remainder in April 2020. It sold off its French TV division for $13 million and is in talks to unload its Roissy Films catalog to Gaumont for an undisclosed sum. The studio's remaining catalog is now valued at $160 million.
The operating margin was up to a positive $10.6 million, mainly attributed to lack of losses in distribution activity in the U.S. The company had partnered with STX for distribution on The Circle, Their Finest and Renegades in a 3-year deal signed in early 2017, though that deal seems to have quietly expired.
Besson recently announced a three-year distribution deal with Pathe for the company's upcoming slate, including Guillaume Canet's Nous finirons ensemble, starring Francois Cluzet, and Mirren's Anna. The latter pic, a spy thriller co-starring Cillian Murphy and Luke Evans, has been touted as a return to form for the Lucy director. The distribution division was previously a profit driver for the company, taking in $44.7 million for nearly 18 percent of the company's revenue in the last fiscal year.
EuropaCorp reduced its slate from 12 films in 2014 to a goal of just five going forward, split between English- and French-language projects. But Besson doubled down on the company's intent to prioritize the production of films and "de-risk the model," the report said. However, after Anna, the pipeline is dry, and with Pathe as its new distribution partner, the company will likely have some say over what Besson can greenlight. EuropaCorp also touted its submarine thriller Kursk, which was released in November in France, but that only brought in around $700,000 at the French box office and failed to find a buyer in the U.S.
Its U.S. TV production division is the lone bright light at the company, with revenue up nearly 80 percent to $22.5 million due to delivery of NBC's Taken. Besson will focus on growing this division with the development of three new English-language series in development: The Extraordinary Adventures of Adele Blanc Sec, Gray and American Flagg.
The company also touted its cost reductions, with overhead down 34 percent to $15.5 million. In its effort to cut expenditures, EuropaCorp has reduced its global workforce from about 170 in 2015, fresh off the massive global success of the Scarlett Johnasson-starrer Lucy, to about 40, and Besson's film school quietly closed in July.