MILAN — Epsilon, a much-ballyhooed pan-Euro joint venture set up to rival the Hollywood majors, was officially axed Sept. 14 by its two owners, Italy’s Mediaset and Germany’s Kirch Group.
But Epsilon divisions Emotion and Evision, operating respectively in the co-financing of films and in the production and licensing of TV product, will continue to operate under new names.
Mediaset also last week finalized the acquisition of a 2.28% stake in Kirch Media, a unit of the Kirch Group. Kirch already has a 1.3% stake in Mediaset.
Both the dissolution of the 3-year-old Epsilon and the acquisition of the Kirch Media stake by Mediaset had been decided a year ago (Daily Variety, Sept. 12, 2000).
“It took some time to dismantle the complex financial structure of the joint venture and its units,” a Mediaset spokesman told Daily Variety.
Evision has already been transformed into a separate company, called Epsilon TV Prods.
Roberto Pace, the CEO of Mediaset licensing and production unit Mediatrade, has been appointed CEO of the new company.
Emotion is still in the process of becoming a separate entity with the legal name of Epsilon Motion Pictures.
“It has not really changed all that much,” Pace said. “The only difference regards the financial ownership of the two entities, which will be now controlled directly 50-50 by Mediaset and Kirch Media instead of being controlled by Epsilon, the dissolved joint venture. All the deals and pledges of Emotion and Evision will be respected.”
Emotion currently has volume or output deals with U.S. indies Hyde Park, Spyglass and New Regency; a deal with Wildwood Enterprises was recently terminated.
In the last few months, Emotion has started producing with Franchise Pictures, but films are agreed upon on a case-by-case basis.
“Altogether, Emotion will invest some $300 million in the U.S. between 2000 and 2003 for about 15 movies per year. We usually finance a movie up to a maximum of 38% of its total budget, which generally does not exceed $80 million,” Pace said.
Evision focuses on co-production of miniseries and TV movies in Europe and, more rarely, the U.S. Annual budget is about $25 million.
Epsilon originally was billed as the first pan-Euro entity to act as a transnational broadcaster, producer-distributor and advertising broker — and an attempt to counter the clout of the Hollywood majors on the Continent.
It eventually was scaled back to focus on joint production and licensing.
According to the partners’ revised agreement, Kirch Media will take back 100% of PKS (then the major shareholder in German TV web Sat.1) and the only asset of Epsilon’s broadcasting unit.
Kirch Media also will get back 100% of distrib Betafilm, which controls Kirch’s 15,000-hour catalog, while Mediaset will regain full control of pan-Euro ad arm Publieuros.
Since the value of Betafilm and PKS is larger than that of Publieuros, Mediaset received $190 million, which in turn was used by Mediaset to acquire the 2.28% stake in Kirch Media.