Montreal: Christal Films Distribution and TVA Films have created an equal-partnership joint venture, Topaze Communications, to share operating costs associated with the sale and marketing of their respective catalogues in the Quebec theatrical, home and TV markets.

Both Christal and TVA Films will remain entirely independent.

Christal Films is majority controlled by Christian Larouche in partnership with Lions Gate Films. TVA Films, the rebaptised TVA International, an integrated production and distribution operation, becomes the distribution arm of media company Groupe TVA, a Quebecor Media subsidiary.

By pooling their marketing and operational costs, but maintaining separate revenue streams, Christal and TVA Films anticipate an immediate, first-year savings of at least $750,000 each, a decisive margin in the small but fiercely competitive Quebec distribution market.

The only way the two companies could achieve a similar economy of scale, says Christal president Christian Larouche, would be to significantly increase their volumes of business, but that would mean assuming even more risk. ‘As of today, we’re a lot less vulnerable,’ he says.

By pooling costs, TVA Films will dramatically reduce its outsourcing expenses, and can afford to exploit its mainly European film catalogue, says TVA Films president Pierre Lampron.

Lampron had been in talks with Seville Pictures and executives who recently launched Incendo Media, and possibly others, aimed at an outright sale of the TVA Films catalogue. But TVA Films was not satisfied with those offers.

Instead, TVA Films will continue to exploit the existing catalogue and output franchises (Canadian rights to product from Studio Canal product mainly intended for North American exploitation, Canal Plus, UGC, Nu Image video titles, etc.), which Lampron says generates about $15 million a year in sales. ‘We will continue to make new acquisitions,’ he says.

Significant assets

‘The value of the catalogue assets of what was TVA International is significant,’ says Lampron. ‘People wanted to buy them but they didn’t want to pay the price and so we refused. And Groupe TVA said, ‘If you are able to reduce the cost of operations in line with [current revenues], and generate profits, we will keep the distribution business and develop it because it makes a lot of sense.’ ‘

Lampron says what did not make sense for TVA Films, or for many other operators in the overcrowded Canadian distribution market, is the burden of $3 million a year in operations and overhead costs.

TVA International released about 20 films (Le Fabuleux Destin d’Amelie Poulain, Le Pacte des Loups, Mulholland Drive) in theatres in the past year. New releases acquired from Studio Canal (a unit of Vivendi Universal) include Jet Lag, starring Jean Reno and Juliette Binoche, and Roman Polanski’s The Piano Player.

Christal distributes 35 to 40 theatrical releases annually, specializing in commercial movie fare from France (films from Christian Verbert and Claude Berri and homegrown releases such as Les Boys). It also sub-distributes Lions Gate Films titles (Monster’s Ball, American Psycho) in Quebec. Christal’s top-line distribution revenues are more than $10 million a year. Christal also produces.

Pooling by Topaze

Lampron says an effective marketing and release organization requires a staff of about 20, while Topaze will require only two or three additional staffers, mainly in accounting. About 80% of Topaze staff will be sourced from Christal.

Through the joint venture, Larouche says the partners have considerably increased their negotiating power, in areas like printing, media buys, videocassette production and other related distribution costs.

TVA Films will maintain a small office in Toronto, five or six staffers, with the accent on broadcast sales (the office traditionally employed about 45). Lampron was set to hire a specialist in English-market TV sales at Playback press time. Marie-Claude Poulin, former production executive with Melenny Productions, is TVA Films’ new EVP.

Lampron says TVA International’s ties (Kids Motion line) to children’s supplier Hit Entertainment are being dissolved.

TVA Films will relocate to new offices in the Christal/LGF building on Victoria Avenue in Westmount.

TVA International staffers have dispersed in many directions, several to Incendo, which acquired the Fox Television franchise, and one or two specialists to Nelvana and Cinar Corp., among others.

In late March, Toronto-based theatrical market veteran and EVP Dan Lyon was unceremoniously dismissed. Lyon told Playback he’s been locked out of his office since and intends to take legal action against the company.

With files from Peter Vamos

-www.tva.ca