German producer-distributor Constantin Film has "considerably" reduced its planned earnings before interest and tax (EBIT) for 2001 after deciding to postpone nine theatrical releases from the second half of this year until the beginning of 2002.
Due to current developments in the German and US distribution markets, the EBIT for the current financial year will now hover between Euros 2m-Euros 5m instead of the originally projected Euros 9m.
Constantin had originally planned to distribute 25 titles , now it will be only 16 this year. Among the films pushed back to the first quarter of 2002 are the Constantin in-house productions and co-productions Slap Her, She's French, Erkan & Stefan 2 and Faust Und Mephisto as well as the third party releases The Count Of Monte Christo, Outcold and Impostor.
An official communique declared that "the decisions to postpone release dates have been taken because of restrictions on film availability and postponements of US release dates as well as the management's conclusion that the box office potential of specific films cannot be exploited fully effectively if they are released in the 3rd and 4th quarters of 2001, due to an excessively large supply of cinema films that has started to become apparent since September". Constantin stressed, though, the postponement to a later point in time "will not, however, have any adverse effect on the potential revenues that can be generated with the films concerned".
Meanwhile, the Munich-based company announced that it had begun adapting its film acquisition policy in response to an "easing of the competitive situation on the German distribution market". "In times of high competitive pressure", Constantin's product pipeline had been filled by its in-house production and titles from its output deals, yet "there is now sufficient choice available on the market again to acquire individual films selectively":
Constantin's strategy of multi-sourcing product for its distribution channels has now been expanded to have the company acting as a distribution service provider for license partners in return for a percentage of the box office receipts without having to assume the risk of the license costs and P&A costs. The first example in this so-called field of "service exploitation" is the cooperative agreement concluded at the beginning of September with RTL Television to handle the theatrical distribution of US films where RTL had acquired all rights.
In addition to announcing the downward correction of its 2001 EBIT, Constantin revealed that it still had a net cash position of more than Euros 25m and unused credit lines of more than Euros 155m as of 30 September.
Meanwhile, the Friday edition of the daily newspaper Sueddeutsche Zeitung reported that the KirchGroup is to transfer its 21% stake in Constantin Film to revamped rights trader EM.TV & Merchandising which already holds a 16.3% interest in Constantin and would subsequently become the Munich-based company's largest shareholder.
According to the newspaper, this transaction between Kirch and EM.TV is part of a larger deal which would see Kirch take over EM.TV's remaining 16.7% share in the Formula One SLEC holding and transfer the other 50% of the Junior TV joint venture operated by EM.TV and Kirch to market children's programming internationally.