×

The U.S. theatrical market has never been more volatile for specialty films, even star-studded ones, but the appeal of Hollywood A-listers hasn’t faded — at least when it comes to finding investors.

Brad Pitt’s Plan B is the latest star-driven production company to be scooped up by deep-pocketed buyers, joining After Reese Witherspoon’s Hello Sunshine, and Will and Jada Pinkett Smith’s Westbrook Inc.

A majority stake of the company, which largely produces movies that often win laurels but seldom turn a profit, was acquired by Mediawan in a deal valued at approximately $300 million. Half of it was paid in cash and the other half in shares of Mediawan.

“We’re seeing some huge acquisition prices for companies that are fronted by a very well known, bankable star, so this is part of a trend where the value is really always linked to the talent,” said Claire Enders at London-based Enders Analysis.

Enders says the deal “just shows that there is a huge prestige attached to a Hollywood star, and for a French company like Mediawan, this is the kind of blue chip marquee type acquisition which will make them feel that they can attract more talent in Hollywood,” Enders continues. That said, she says Mediawan is paying an “absurd price” to “buy something as nebulous and conceptual as the value of Pitt’s relationships and the attraction that he will hold to other bankable stars.”  Some would argue, however, that the price paid by Mediawan is coherent with Plan B’s financial health.

Backed by KKR and Atwater, the privately held company was launched seven years ago by Pierre Antoine Capton, telco billionaire Xavier Niel and financier Mathieu Pigasse, as a special-purpose acquisition vehicle listed on the Paris stock market. It rose in prominence through high-profile acquisitions of over 60 indie production labels with a track record of making both TV and films. These include Mon Voisin Productions (“Call My Agent!”), Chi-Fou-Mi (“November”), and Dimitri Rassam’s Chapter 2 (“The Three Musketeers”). 

With Plan B, Mediawan will be looking to leverage Pitt and his partners Dede Gardner and Jeremy Kleiner’s relationships with agencies and high-pedigree talents to make more prestigious movies.

Still, Peter Newman, head of New York University’s MBA/MFA dual degree program, says “there’s never been such a profound disconnect between quality product and financial success.”

“The content industry is based on name brand relationships, taste and quality, and obviously Brad Pitt is a name brand,” says Newman. “He, Gardner and Kleiner have got great relationships with talent and with distributors around the world, and great taste which is exemplified by the amount of films they have that have either been nominated for or won Academy Awards and other major awards.”

Indeed, Plan B boasts a string of successful awards fare, with three of their films, “The Departed,” “Moonlight” and “12 Years a Slave,” all winning the Oscar for best picture.

“But their libraries are virtually non-existent…and if you look at the likely films that will win huge accolades at the next Academy Awards, it would take a miracle for them to become highly profitable,” Newman continues.

Case in point: Plan B’s latest film “She Said” has earned warm reviews and is being talked about as an Oscar contender, but it bombed at the box office. The movie about the New York Times reporters who broke the Harvey Weinstein story has only earned $10.3 million worldwide.

When asked about the commercial performance of Plan B movies, Capton said he wasn’t so concerned because “the demand for quality content is extremely strong. And ‘She Said’ is exactly that.”

Capton also suggested that Plan B will probably be less reliant on the U.S. under Mediwan’s helm. For one thing, Plan B will be able to tap into Europe’s wide-ranging financial resources, from the backing of French studios to lucrative soft-money schemes. They’ll also be diving into TV series, which Capton said was one of the strategic aspects that triggered Plan B’s interest in Mediawan, which is extremely well-connected within the European TV landscape. The French group is behind “Call My Agent!,” among other series and documentary hits.

As Enders notes, “France has a unique position in Europe because producers have a protected IP position” which she says isn’t the case elsewhere, including even the U.K. where producers increasingly “operate at very low margins with fewer and fewer rights.” France is the first country in Europe to have reached an agreement with streamers such as Netflix and Amazon to regulate domestic content investment and rights ownership as part of the E.U.’s Audiovisual Media Services Directive. Local TV groups such as Canal+ also have French and European content investment obligations, which Plan B titles could fit into if the financing comes from the continent. 

Yet, unlike many film groups that have gone into TV, Plan B probably won’t have many options for spinoffs of its biggest movies since it doesn’t own the underlying intellectual property. Those remain with the studios that financed them. But even if they did, the movies they tend to make “don’t lend themselves to sequels or trilogies or remakes or anything of that sort,” points out Newman, adding that Plan B “doesn’t either have a huge reservoir of developed projects to make.”

But Plan B’s dearth of library titles and developed projects isn’t worrying Capton, either. He said the idea behind the deal was for Mediawan and Plan B to create value going forward.

“Once in a while we’ll look to finance content in order to keep 100% of their IP,” said Capton.

Several companies such as EuropaCorp and Vivendi tried and failed to make it in the U.S., mostly because their oversized ambitions. EuropaCorp attempted to get into the theatrical distribution business with a financially doomed banner, Relativity Media; while Jean-Marie Messier nearly bankrupted Vivendi with the $42 billion acquisition of Seagram, the owner of Universal Studios 20 years ago. But Capton says these two examples date back to a time when the content industry was strictly local.

“Today, the content market is global… We have French talents like Omar Sy, Florian Zeller or Louis Letterier who are behind huge machines in the U.S,” said Capton. “What I’m focusing on now is a strategy for the years to come, for the future, in order to allow my group to grow and thrive.”

“Everybody’s talking about what we did because we set a foot in the U.S. with the biggest star in the world but the reality is that we’ve essentially brought together like-minded producers,” adds Capton.

Mediawan began its foray in the U.S. earlier this year with the launch of Blue Morning Pictures, along with Zeller, the French playwright-turned-filmmaker whose feature debut “The Father” won two Oscars, and former CAA agent Federica Sainte-Rose. And Capton suggested a project bringing together Zeller and Pitt could be in the cards. 

“The team at Plan B has a lot of respect for his work, and it’s mutual,” he hints.

VIP+ Analysis: Inside Prestige Films’ Box-Office Blues