Canal Plus in 15-Movie Deal With Ovitz

The film production arm of Canal Plus, the European pay TV company that would oversee Universal Studios under parent Vivendi’s plan to buy Seagram Co., revealed Thursday that it has quietly hatched a film production deal with talent manager Michael Ovitz for as many as 15 films over three years that may bypass Universal’s distribution arm entirely.

The deal raised eyebrows because it was forged without the knowledge of Universal executives, including President Ron Meyer, even though it has been in the works for months. Meyer and Ovitz, once close friends and founding partners in Creative Artists Agency, have since become estranged.

Richard Gavzilli, co-president of Canal Plus U.S., confirmed that Universal executives only recently were told about the deal as final details were being worked out.

“We gave them a heads-up in the last few days,” Gavzilli said.

Meyer declined to comment.

Under the deal, Canal Plus’ Studio Canal will form a joint venture with Ovitz’s Artists Production Group. Canal Plus will finance 60% of the budgets, expected to range from $30 million to $80 million, with the average being about $60 million. The other part is expected to be financed by domestic distributors on a project-by-project basis. Canal Plus will get foreign distribution rights to the films.

Ovitz said both he and Canal Plus wanted the flexibility to negotiate each distribution separately for the best leverage. He added that despite overseeing Universal, Canal Plus wants to continue to arrange deals with other studios. Canal Plus is a major buyer of studio films that air on its European TV channels.

For Ovitz, the deal carries little risk, outside of splitting the cost with Canal Plus of a development fund that sources estimate at about $25 million over three years. His company will receive a producer’s fee, as well as a piece of the gross that sources put at 5%.

“If there’s something we can co-finance with Universal, great. If there’s something they want to be involved with, great. But we aren’t confined to any one place,” Ovitz said.

Ovitz said projects his operation has in development will be put into the company, and that Canal Plus already has bought rights to several projects.

Ovitz executive Cathy Schulman will oversee production, and Ovitz’s APG will run the company.