Shares in France’s pay TV giant Canal Plus tumbled last week – and much of the damage was the result of the paybox’s Hollywood investments, particularly in Carolco.
Profits for 1994 were down 47.9% to 626 million francs ($127 million) from 1.2 billion francs ($245 million) in 1993. Revenues were up 10% to $1.9 billion.
Web insiders say they won’t invest another dollar in the Hollywood production company and would gladly sell out – if they could just find a buyer. They also said that the days of heavy production investment in U.S. pix are over.
Carolco continues to weigh heavily on the Canal Plus purse. Even the relative box office success of “Stargate” isn’t going to help Canal Plus. Le Studio Canal Plus has already written off $7 million against the pic.
Canal Plus chief financial officer Claude Ravilly confirmed last week that the network’s Hollywood production ambitions are virtually over. “We consider our investment in Carolco to have a zero value now and if we could find a buyer for our stake we would sell,” he said. “The trouble is there are no buyers.
“We aren’t going to be majority co-producers in the United States and we aren’t going to repeat a ‘Stargate’ experience,” he said. “We will continue to buy Hollywood films and we might conceivably take a minority co-production position, but that’s all,” he added.
Having returned to profit in 1993 following losses the previous year, Le Studio Canal Plus is once again back in the red. Ravilly estimated the losses at around $40 million. Canal Plus has a 60% stake in the film production outfit.
Analysts were taken aback by the extent of the profit decline. Most had been expecting a worst-case scenario of profits bottoming out at $153 million.
While Canal Plus remains France’s most financially successful TV company, the $127 million profits are the lowest in seven years. The Paris Bourse reacted negatively – trading was stopped twice March 10 – spurred on by estimates that while revenues will be up 5% next year, profits are not expected to increase. Canal Plus stock dropped 15%, closing last week at $130.