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Gaumont eyes growth; Latest exhib to study expansion beyond border

Eight years after it pulled out of an exhibition foray in Italy, Gallic major Gaumont is once again studying the idea of expanding its hardtop interests outside France.

Gaumont’s renewed interest in Europe confirms a recent trend among the major French exhibitors who are sizing up investment opportunities in neighboring territories.

In May, exhibitor Pathe’s parent company Chargeurs announced it is teaming up with Warner Bros. International Theaters and Morgan Creek International Theaters to build multiplexes in the Netherlands. Meanwhile UGC continues to negotiate with the Madrid authorities over construction of a multiplex there.

“We are looking at all the countries around us,” Gaumont exhibition topper Jean-Louis Renoux told Variety. “The Americans have a strong presence in the U.K., they have a foothold in Germany and they are showing interest in Spain; we don’t want to be left behind in the exhibition sector.”

Gaumont has concentrated on developing and renovating its French circuit since withdrawing from Italy in 1985 after an unsuccessful and costly attempt to expand into Italian production and exhibition.

Spanish plans

Renoux denied rumors circulating during the Cannes Film Festival that Gaumont is talking to the Barcelona city authorities about building an 18-screen multiplex, but he acknowledged that “Spain is a very interesting market.”

That opinion is shared by UGC, where company president Guy Verrecchia last week confirmed to Variety that plans exist for “what would probably be a 15 -screen multiplex in Madrid.”

Cost estimates

Although Verrecchia wouldn’t be drawn on the investment required for such a project, estimates are that it could cost in the region of 100 million francs ($ 17.6 million). “It’s premature to talk of a startup date because we are still in negotiation to see if we actually go ahead with the project,” he noted.

According to Verrecchia, UGC’s choice of European sites will be based on a city-by-city approach, rather than trying to establish national circuits in the various territories. “We are thinking in terms of large population centers.

“If we see one in a neighboring territory and we feel that the target is poorly served in terms of screens, then it is just as interesting to us as a French site.”

Enticing revenue

Equally attractive for the French is the fact that in most European territories the amount of revenue from ticket sales that stays in the hands of the exhibitor — around 60% on average — is greater than the average 50% in France.

Chargeurs president Jerome Seydoux has come out strongly against the French norm, insisting that as exhibitors are taking risks by investing heavily in new multiplexes, they should have access to greater box office receipts.

Earlier this month Seydoux opened a 12-screen, 87 million franc ($ 15.3 million) multiplex in Toulon. Later this year a second multiplex costing slightly over 90 million francs ($ 15.8 million) opens outside Paris. Seydoux has gone on record as saying that new multiplexes can only be envisaged in France if there is some evolution in the division of receipts.

The more attractive division of coin in the Netherlands, where exhibitors hold on to around 60% of revenues, is one of the reasons cited by Chargeurs execs for their decision to pact with Warner Bros. and Morgan Creek in building multiplexes in that territory.

Under the terms of the three-party deal, Chargeurs, Warner Bros. and Morgan Creek will start work on an eight-screen complex near The Hague this year, and there are plans for further multiplexes in Amsterdam and Rotterdam.

The mysterious south

Despite the newfound French enthusiasm for international expansion, one territory which seems likely to be way down the list of investment targets is Italy.

UGC president Verrecchia told Variety recently that he found the Italian business practices a little too “mysterious” to visualize a move into that market.

Over at Gaumont, the unsatisfactory attempt to establish a foothold in the territory between 1981 and 1985 has left the company wary. “I really can’t see (company president) Nicolas Seydoux giving the go-ahead to Italy,” commented Jean-Louis Renoux.