Studio Canal inks $900 mil prod'n deal with APG

PARIS — The French have planted another flag in American soil: Canal Plus on Thursday unveiled a $900 million deal with Michael Ovitz’s APG to produce and distribute feature films for the international market.

The new venture, based at APG, will produce five films a year, with budgets ranging from $30 million to $80 million, over the next three years.

Canal Plus will put up 60% of the budgets as well as a substantial development fund. Ovitz will obtain bank financing for the rest.

Cathy Schulman will be in charge of production, while the venture will be headed by a management team consisting of an equal number of executives from both sides. APG has five production execs on its staff.

Deal instantly establishes Ovitz’s company as a major production entity — and should provide a boost to his talent management biz, whose clients will no doubt figure prominently in the projects of the joint venture.

Studio Canal will retain worldwide distribution rights excluding North America, where distribution will be decided on a pic-by-pic basis. Universal will not necessarily have first position for U.S. rights, despite its pending acquisition by Canal Plus parent Vivendi.

For Ovitz, deal caps a yearlong hunt for an all-important strategic partner that will allow the nascent APG, the film production arm of AMG, to fund movies independently of the Hollywood studios.

“We are delighted to form a long-term partnership with a studio that has the resources, expertise and global reach of Studio Canal,” he said.

Ovitz is, however, understood to be in advanced talks with several other possible strategic partners who would help cover the fast-growing overhead of AMG. Most deficits on the company’s TV projects, under the ATG banner, are covered by Sony.

Long-term relationship

Ovitz enjoys a long-standing relationship with Canal Plus chairman Pierre Lescure that dates back to his percentery days at CAA. Talks about a joint venture began several months ago, Studio Canal chief Vincent Grimond told Daily Variety.

The deal surprised Hollywood insiders Thursday since the French, having just made a huge commitment to Universal, will now channel other resources to an entirely separate entity with a perhaps separate distribution apparatus.

Universal’s relations with the talent agent community could in fact be complicated by the fact that their Gallic parents are in business with Ovitz, whose management company has ruffled the feathers of some tenpercenteries.

For the French, however, this latest deal seems to indicate that there’s plenty of life in Canal Plus’ idea of creating a Euro studio, despite suspicions to the contrary.

Many had thought it doomed when the Vivendi buyout of Seagram was announced because the acquisition of Universal — which already has a Euro distribution deal with UIP –appeared to rob Studio Canal of its raison d’etre, namely, the creation of a pan-European studio with production and distribution in the major Euro territories.

Describing the deal with Ovitz as “another step in the construction of our European studio,” Grimond said he felt “intense satisfaction” about teaming up with Ovitz, “a key person, a great name in Hollywood.”

The deal, he said, “gives us exactly what we were looking for: guaranteed European distribution of the films we want.”

Third U.S. pact

Pact reps the third U.S. film co-production agreement into which Studio Canal has entered, following similar partnerships with Universal in Working Title and with Warner Bros. in Bel Air, although the terms are not quite the same.

The Working Title partnership involves such films as Sally Potter’s “The Man Who Cried” and the Coen brothers’ “O Brother, Where Art Thou?”; forthcoming Bel Air releases include “The Replacements,” directed by Howard Deutsch and starring Keanu Reeves and Gene Hackman, and Andrew Davis’ “Collateral Damage,” with Arnold Schwarzenegger.

Studio Canal also acquires film rights in the U.S. through deals with Mandalay Pictures, Phoenix Pictures, Spyglass and C+P, a joint venture with Pathe. In addition, it purchases French rights to international films and is becoming more active in trading rights.

APG’s current slate includes Ed Burns’ “Sidewalks of New York,” currently in post-production. With the Donners’ Co., it is co-producing Michael Crichton’s “Timeline” and the political thriller “The 28th Amendment.”

Also slated for production this year are “Gravity,” based on Tess Gerristsen’s bestseller, and Tom Clancy’s “Rainbow Six.” Company has more than 35 projects in development.

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