MADRID — In Julio Medem’s “Sex and Lucia,” produced by Spain’s Sogecine, a lovelorn Spanish lass decamps to a Mediterranean island to retox after a bad relationship, aided by large doses of sex.

But the fact that the film is sold at Cannes by Sogecine’s cousin company, distributor Sogepaq, points to a larger, corporate coupling.

After years of working as separate subsids of parent company Sogecable, producer Sogecine and distribber Sogepaq are progressively pooling their operations into a single film unit.

The fusion will create the biggest mini movie studio in Spain, headed by Sogecine general manager Fernando Bovaira. It will utilize a StudioCanal style structure based around a powerful producer, Sogecine, with a muscular distrib arm and a single strategic vision.

Sogepaq will remain a partner in Escape Artists, and maintain relationships with favorite suppliers such as Icon. Sogecine and Sogepaq will continue as separate legal entities for the moment.

But the new combo will mark some significant strategic changes.

Rather than competing for distrib rights to U.S. blockbusters in Pyrrhic bidding wars, the combo is likely to look more toward Europe for product. Signs are, that beginning at this week’s Cannes Film Festival, it will source much more “A” product by partnering in top-tab Euro co-productions.

And Sogepaq looks set to handle international on far more Sogecine pics.

Julio Medem’s previous pic, “Lovers of the Arctic Circle,” for example, also produced by Sogecine, was picked up for worldwide by StudioCanal in France. At Cannes, Sogepaq will sell both “Sex and Lucia” and Sogecine’s other new pic, Juan Carlos Fresnadillo’s feature film debut “Intact.”

Sogepaq will continue to make select international pick-ups of third-party Spanish films. Margaret Nicoll remains Sogepaq general manager, overseeing all operations. Alix Goldschmidt will focus on national sales to Spanish broadcasters. Eva Diederix will head Sogepaq international sales.

The combo also marks a cost-cutting drive at Sogecable.

A joint venture of managing shareholder Prisa (21%) and Canal Plus in France (21%), Sogecable’s core business remains pay TV. It boasts 800,000 analog subscribers at paybox Canal Plus Espana. Digital bouquet Canal Satelite Digital (CSD) has more than 1.1 million subs.

With net losses of just $10 million for 2000, Sogecable is in no way in the dire straits of Italian counterpart Telepiu.

Both Sogepaq and Sogecine have seen success. Sogepaq picked up two of the three U.S. releases last year which grossed more than $100 million and were available on the indie market: “Chicken Run” and “What Women Want.”

Since 1996, year on year, Sogecine has faced off with Lolafilms as the highest-grossing producer in Spain.

But Sogecable’s priority is to hurry toward net profits, this year or next. That has led to a reorganization at the conglom, and a drive to eliminate redundancies at comparable companies such as Sogepaq and Sogecine.

Sogecine will maintain its stable of young Spanish auteurs, who produce upscale genre pics — like Alejandro Amenabar, whose Nicole Kidman starrer “The Others” will be a Miramax release in the U.S.

In looking more toward Europe, Sogecine is making a virtue out of necessity. Spain’s new version of the EU Television Without Frontiers Directive obliges TV operators to invest 5% of their annual revenues pre-financing Euro movies.

For Sogecable, this 5% quota could mean a minimum $40 million Euro pic commitment next year, including pay TV pre-buys of Spanish films.

One open question is whether Sogecable can meet this obligation just with films originated from Spain.