CANNES — Universal Pictures has finally closed a 50-50 joint venture with France’s Canal Plus to co-finance the production, development and operational costs of Working Title Films, U’s London-based production company.

For the first three years of the deal, Canal Plus will get continental European TV rights to all of Working Title’s movies. It will also receive theatrical and video rights in France to every second film produced by the company, with Universal Pictures Intl. retaining the other half of the slate.

Starting with the fourth year of the deal, that equal split of theatrical and video rights will be extended across the whole of the Continent.

UPI will continue to release all of WT’s films in English-speaking territories, and in any other non-European countries where it opens its own distribution operations in the future. UPI also plans to launch in Latin America next year.

Sales in other territories will be divided up between UPI and Canal Plus.

Radical deal

This radical co-financing deal was initiated by Working Title co-chairmen Tim Bevan and Eric Fellner, who recently signed a new five-year deal with U giving them wide-ranging powers to greenlight their own movies with budgets of up to $25 million.

The two were keen to cement their autonomy by bringing in another financier and to restore their European links after the sale of WT’s former Dutch parent Polygram to U.

For U, the deal offers a massive injection of cash — Canal Plus’ contribution to WT’s annual production slate alone will be $50 million-$100 million — while taking films off its balance sheet.

The pact is being financed under a bank deal with Societe Generale.

Film flow follows

For Canal Plus, the agreement guarantees a flow of movies from Europe’s most successful film production company, initially for its Euro TV outlets and later to fuel its expanding theatrical ambitions.

WT looks set to shoot at least half a dozen films in the next year. The first film to fall under the deal is the Coen brothers’ “O Brother, Where Art Thou?,” which just started shooting in Mississippi and will be released in France by UPI.

WT’s next project looks likely to be “Bridget Jones’ Diary,” which will go to Canal Plus in France. Also upcoming is “Captain Corelli’s Mandolin.”

Everyone is happy

Ron Meyer, prexy and chief operating officer of Universal Studios, said, “This strategic partnership … fulfills Universal Pictures’ commitment to increasing its global production and distribution activity while continuing our strategy of bringing in key partners for strategic co-financing.”

Pierre Lescure, chairman and chief exec of Canal Plus, said the deal is “significant for the European film industry.”

Vincent Grimond, chief exec of Canal Plus Image, the distribution arm through which the deal is channeled, commented, “We have always considered Tim and Eric as great producers. We share the same vision and the same culture. Working Title has proven that European films can achieve global critical and commercial success.”

Bevan and Fellner said, “This partnership between the U.S. and Europe mirrors our continued strategy to produce European movies with truly international appeal.”