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Luc Besson’s EuropaCorp Grasps for Sorely Needed Hit in ‘Valerian’

Luc Besson EuropaCorp Searching for Hit
Chris King for Variety

EuropaCorp has been on a white-knuckle ride over the past three years, but the struggling French studio hopes that “Valerian and the City of a Thousand Planets” will end its recent run of flops and propel it back into the box office stratosphere.

If the hugely expensive science-fiction epic flames out when it debuts this summer, it could be disastrous for the French studio behind  “Lucy” and “Taken.” Launched by director Luc Besson in 2000, the company had grand ambitions to become one of the world’s biggest film players. But EuropaCorp’s trajectory has taken a downward turn since it started self-distributing its movies in the United States in 2014. The results have been sobering. The studio has struggled to find hits, releasing one dud after another and losing tens of millions of dollars in the process.

The setbacks come as the company is preparing to release “Valerian,” the story of two space agents battling a dark force in the far reaches of the galaxy. The adventure didn’t come cheap. “Valerian” cost $180 million to produce, making it the most expensive independently financed movie in history — and that’s before counting its global marketing and distribution costs of at least $100 million. Rival studios and insiders estimate the film must make at least $400 million worldwide to climb into the black and justify a sequel.

As the flops have mounted, EuropaCorp’s stock price, once at €17 ($18.50), has been languishing at roughly $3.25 in recent months. There have been rumors that the company is being shopped, with Mediawan, Altice and Vivendi among those sniffing around as potential buyers. EuropaCorp declined to comment on a possible sale.

Besson has been one of the most successful international filmmakers. 1985’s “Subway” announced him as a director with a bold visual sense and an ability to orchestrate balletic action sequences. That command of the camera rarely wavered, with Besson routinely beating the odds to turn the likes of “The Fifth Element” and “Lucy” into global hits. With “Valerian,” he’s putting his reputation and that of his company on the line to bring a passion project to the big screen. If it works, it will re-establish EuropaCorp while launching a sorely needed new film franchise to rank alongside Besson’s “Taken” and “Transporter” series. If it falters, it could torpedo the company’s share price.

“Don’t confuse a big bet with a big risk,” said Marc Shmuger, EuropaCorp’s CEO and former chairman of Universal Pictures. “Luc in the past 20 years, if you look back at his accomplishments, has had a unique record of generating homegrown franchises.”

Besson and EuropaCorp executives had hoped that the combined star power of Tom Hanks and Emma Watson would turn their spring release “The Circle” into a hit. But instead of snapping the losing streak, the thriller became the latest casualty, grossing an anemic $17 million. Production on the film was tortured. Director James Ponsoldt and the studio had “mutual cut,” meaning both had to sign off on the final product before its release. EuropaCorp executives and Ponsoldt spent six months differing on what needed to be reshot, ultimately deciding to film new material in January that would humanize Watson’s character. They were particularly concerned that her reaction to the death of a central character came off as too wooden. However, scores for the film failed to improve. When “The Circle” debuted in April, reviews were brutal, and audiences handed it a D+ CinemaScore.

“Valerian and the City of a Thousand Planets” bows July 21.
Courtesy of EuropaCorp

The same fate befell “Shut In,” a psychological thriller with Naomi Watts that also reshot its ending only to bomb with a $6.9 million domestic gross and withering notices. Those flops join a list of misfires that include “Nine Lives” and “Miss Sloane.” “They were making films that felt like they should have come out 20 years ago,” said Jeff Bock, a senior box office analyst with Exhibitor Relations. “They felt like ’80s or ’90s rejects.”

In February, EuropaCorp warned investors that losses will reach a record high this fiscal year, topping the $44 million loss it posted in 2010. Compounding issues, the company became entangled in the bankruptcy woes of Relativity Media, the high-flying indie studio that filed for Chapter 11 in 2015 only to emerge from protection to another round of flops. The two companies co-owned a distribution and marketing joint venture that EuropaCorp had to pay to run while Relativity struggled to find cash. Shmuger, who took the reins at EuropaCorp in 2016, acknowledged that a “course correction” was needed.

“In the past year or so, we recognized that EuropaCorp strayed too far from its core strength, which is producing slick genre films for the right price that travel successfully around the globe,” Shmuger said.

As part of that shakeup, EuropaCorp overhauled its U.S. operations. In January, it laid off the bulk of its theatrical distribution staff and tapped STX Films as a distributor-for-hire. Other studios made offers to handle the rollout of EuropaCorp’s films, but STX’s pitch was the most financially appealing. The studio will take a lower distribution fee than other prospective partners and will put up a percentage of the promotion and advertising costs for “Valerian.”

Seeking cash to finance its slate, Europa-Corp also raised $67 million in equity capital from a subsidiary of Fundamental Films in China, and sold its two multiplexes to Cinemas Gaumont Pathe for approximately $22 million. It has taken steps to mitigate its financial risks on “Valerian,” raising roughly 90% of the film’s budget through a combination of presales and equity investment. The company says it has limited its exposure to less than $15 million — a move that will also cut into its potential profit.

Insiders say that the company has been in wait-and-see mode until “Valerian” opens. It is moving forward with some projects, including the $20 million submarine thriller “Kursk,” which stars Colin Firth and Lea Seydoux.

“Valerian” premieres in the heart of the summer, putting it up against sequels to “Transformers” and “Despicable Me.” It debuts on July 21, the same weekend as “Dunkirk,” a World War II epic from director Christopher Nolan. Internally, there has been debate about the studio’s decision to keep that release date instead of pushing it back to August, when there is less competition.

“They must be confident in the movie if they’re going to jump into these shark-infested waters,” said Paul Dergarabedian, senior media analyst at comScore.

Besson has called “Valerian” a passion project, saying that he became obsessed with the comic “Valerian and Laureline” as a kid growing up in the late ’60s. He was bewitched by the stories of space travel and the alien creatures that the characters encountered as they sped from one planet to another. Those boyhood memories inspired him to labor for more than a decade to bring “Valerian” to screens. Despite Besson’s commitment, the stories remain little known in the United States. That makes the film one of the biggest gambles of the summer movie season.