CANNES — Producer Arnon Milchan announced Wednesday that his Regency Enterprises has closed an exclusive output deal with France’s digital television consortium Television Par Satellite (TPS), a deal that has raised the hackles of Canal Plus, which has had various co-production and acquisition agreements with Milchan since the start of the 1990s.

Execs at TPS said the deal is set for four years and would provide the platform with between 30 and 40 pics over that period. TPS would get pay-per-view as well as first- and second-run pay TV rights, effectively keeping the pictures off Canal Plus and its digital subsid Canal Satellite, which is in direct competition with TPS.

The giant pay cabler apparently still has an exclusive agreement with Milchan for firstrun pay TV, and that deal has several years to run.

Canal Plus’ network management, talking to Daily Variety Wednesday, expressed surprise at the TPS deal and intimated that it reserved the right to react, noting, “Regency could not have been unaware of its existing agreement with Canal Plus, and TPS had been advised of such an agreement.”

The exact nature of the Canal Plus reaction is not clear, but there is a good chance that the pay TV company could take Milchan to court, starting proceedings as early as today. Milchan said late Wednesday that he thought Canl Plus was overreacting and that its position was untenable.

TPS insiders noted that as far as they knew, Milchan’s agreement with Canal Plus had lapsed because Canal Plus had not met certain clauses included in the agreement.

Earlier in the day TPS execs seemed unaware of the storm that their agreement was about to unleash.

TPS cinema programming director Guillaume de Posch said the agreement with Regency initially runs for four years and is renewable.

Among the first titles to hit TPS will be golf movie “Tin Cup,” starring Kevin Costner. Other early titles include “A Time to Kill,” starring Sandra Bullock and Matthew McConaughey, “Murder at 1600,” toplining Wesley Snipes and Diane Lane, and “Devil’s Advocate,” pairing Keanu Reeves and Al Pacino.

Although TPS acquisition chief Philippe Bony wouldn’t give details, Regency’s payments from the digital operator will depend on the French box office results of the Milchan-produced pics.

For TPS, the deal marks the first with a mainstream indie production outfit and comes in the wake of last year’s ferocious battle with Canal Plus to secure rights to Hollywood studio fare.

On the firstrun pay TV front, TPS’ two film channels, Cinestar 1 and Cinestar 2, now have exclusive rights to Paramount, MGM, New Regency and (until 1998) Universal product.

Canal Plus has deals with Columbia TriStar, Disney, Warner Bros., Fox and Universal (as of 1998).

TPS, launched last December, currently has some 140,000 subscribers. TPS execs told Daily Variety that the Regency agreement could be repeated in the U.S. with other heavyweight indies.

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