The SFP is back from the health farm. After a radical three-year “cure,” France’s largest TV production company has lost weight and is off the critical list.
The question is: Are the changes only cosmetic, or will the once-overblown bastion of inefficiency be able to survive in the increasingly competitive TV market?
According to Societe Francaise de Production president Jean-Pierre Hoss, the company doesn’t have much choice: “(We) must learn to operate in the open market. We have to make profits because the days of endless government bailouts are over.”
With his three-year restructuring operation well under way, Hoss plans other aggressive moves:
o Selling off the company headquarters at Buttes Chaumont for an estimated 500 million francs ($ 94 million). Some of the staff will join the company’s Paris-suburb production facility at Bry Sur Marne, while the rest will go to the newly acquired Communication Village north of the French capital.
o Pinkslipping another 427 employees.
o Opening up SFP capital to private investors.
o Taking minority or majority stakes in indie TV production outfits.
o Taking on the role of exec producer via the recently reformed film production arm SFP Cinema.
Hoss also expects to move from a $ 32 million loss this year to a profit by the end of 1994.
Realizing such objectives would amount to a quantum leap for the SFP. Between 1975 — when the company was formed following the break-up of the state-owned TV giant ORTF — and 1986, the SFP enjoyed a monopoly in the TV production market.
Financed by TV license fees and guaranteed orders from pubcasters, the SFP paid little attention to realities of the business world.
But in 1986 the conservative government stopped license fee payments, worth around $ 16 million that year, and scrapped the system of guaranteed orders from the public TV networks. The result was a torrent of red ink.
On taking over the helm of the SFP in 1989, Hoss instituted a radical rescue package: “It was obvious that we had to substantially reduce overheads.”
Not surprisingly, SFP employees didn’t jump for joy when Hoss spelled out his plan. Indeed, angry workers locked the president in his office for 24 hours. The work force was cut from 2,200 to 1,427, “and within the next 24 months we will be down to 1,000,” noted Hoss.
Hoss also split the company into nine subsids, ranging from SFP Production to SFP Costumes. He now aims to encourage outside investors to take stakes in some, if not all, the divisions.
Hoss is not simply trying to bring private coin into the SFP. He is also looking to make strategic acquisitions.
First up could be French film and TV prod company IMA, which is in financial trouble. Negotiations are under way, and while no final decision has been made, Hoss said that the SFP might buy IMA within the next few weeks.