French pay TV giant Canal Plus has signed a longterm output deal with 20th Century Fox, providing the paybox and its digital subsidiary Canal Satellite with exclusive rights to Fox pics.
The five-year deal, with an additional five-year option, is a huge win for Canal Plus in its ongoing battle with rival Gallic digital consortium Television Par Satellite (TPS). Fox was the last of the Hollywood majors to sign an output deal with one of the two digital platforms in France, and sources speculate the agreement could lead to a massive restructuring of digital TV players throughout Europe.
While 20th Century Fox would not comment and Canal Plus could not be reached, sources say the deal is similar in value to MCA Inc.’s recent Canal Plus deal, which was worth an estimated $30 million to $50 million a year to the studio (Daily Variety, Oct. 29).
Tuesday’s deal provides Fox product for Canal Plus’ core pay television network, pay-per-view rights for Canal Satellite’s Kiosque PPV service, as well as secondary pay TV rights for cable and sat channels Cine-Cinemas and Cine-Cinefil. In addition, Canal Plus and Fox have agreed to carry each other’s channels on their digital platforms around the world.
Striking the deal were Canal Plus chairman Pierre Lescure; Mark Kaner, Fox’s president of international TV and worldwide pay TV; and Ken Bettsteller, exec VP of worldwide pay television. Fox is working on a separate free-TV deal in France, which Kaner says won’t be hurt by the decision to bypass TPS, a consortium of the nation’s largest free-TV broadcasters: TF1, France Television and M6.
In what has turned into an acrimonious war between the two rivals, Canal Satellite now has studio deals with all the majors except Paramount and MGM, which allied with TPS. As the studio cards have begun to fall into place recently, TPS is known to have made strenuous but unsuccessful efforts to sign deals with MCA and Fox. Both TPS chairman Patrick Le Lay and his Canal Plus counterpart, Pierre Lescure, were recently in the U.S. to negotiate.
Sources say Fox’s the decision to ally with Canal Plus may be related to News Corp.’s other TV interests in Germany and the rest of Europe. News Corp. may be trying to buy all or part of Canal Plus’ stake in the German pay TV channel Premiere, which is now owned by the Kirch Group, Bertelsmann and Canal Plus.
Kirch and News Corp. are allied in Germany’s DF1, and Kirch wants Premiere to be a part of the DF1 platform, but its Premiere partners do not. In exchange for convincing Canal Plus to sell its stake in Premiere, Kirch could give Canal Plus its stake in the Italian Telepiu, which they now co-own. Canal Plus has said it is considering the move.
Fox’s Kaner said the Canal Plus-Fox deal was unrelated to Premiere. ”There is no express linkage between the issues,” Kaner said. ”This deal stands on its own.”
However, a high-ranking News Corp. executive said the Canal Plus output deal ”may help the current impasse on the road to solution” in Germany and Italy.
For Canal Satellite, the Fox output deal enhances its position as a premium service. The digital platform will now have access to the likes of ”Independence Day,” “Romeo & Juliet,” ”Braveheart” and ”Broken Arrow,” as well as upcoming Fox product such as ”Speed 2: Cruise Control,” ”Alien 3: Resurrection,” ”Titanic” and ”The Crucible.”
TPS, which is due to launch later this month, has officially positioned itself as a less costly, non-premium digital offering. TPS chairman Patrick Le Lay has repeatedly said that there is room for both digital platforms. Nevertheless, his failure to bring Fox on board is a serious setback.
Le Lay’s platform will now fundamentally rely on Paramount product for its Hollywood fare, as MGM films will take some time to come on stream. MGM’s production was stalled during the hiatus that attended the sale of the studio earlier in the year.
For Hollywood, the Gallic rivalry has meant another big payday following that of Germany. Although exact figures have not been given, it is understood that TPS ponied up a cool $50 million to $60 million per year for pay and free TV rights to Paramount, and a further $13 million a year for the MGM agreement.
Kaner said no final decision has been made on the channels the two companies will develop together and carry on their worldwide platforms, but a Fox Kids network channel is likely to be among them.