Elements of media mogul Vincent Bolloré‘s Vivendi empire will list separately outside of France following several clashes with the Élysée - Eric Piermont/AFP/Getty Images
At a Fortnum & Mason after-party following the premiere of Paddington in Peru, Olivia Colman and Hugh Bonneville were among the guests celebrating the latest instalment of a franchise that for many is the paragon of Britishness.
Yet the studio that brought the children’s books to the screen is French, not British. Paris-based Canal+ is behind the films – and for the executives at last month’s Fortnum bash, it was a celebration of their latest coup in English-language cinema.
The listing in London will give Canal+ a listing through which it hopes to mount a challenge to Netflix and Disney+ as Europe’s streaming champion. It will also raise the profile of Bolloré, a mogul dubbed the “French Rupert Murdoch” who is worth $10bn (£7.9bn) and whose perceived support for Marine Le Pen’s National Rally has drawn increased scrutiny at home.
For Maxime Saada, the chief executive of Canal+, the listing represents a turning point.
“If you look at Canal+ in the last 10 years, although it was expanding, it was a defensive strategy from a company that was very French-centric, that was very dependent on just a few pieces of content, and that was very dependent on an older generation of customers,” he says in his office at the company’s headquarters on the outskirts of Paris.
“Now, we are at a point where this company is viable, it is making profits. It has a solid, sound financial base and we’re ready to start the next phase, where we will play offense.”
Chief executive Maxime Saada said the French ‘regulatory and the tax environment’ was not conducive to Canal+’s growth - Patrick Gaillardin
Canal+ has alighted on London as the best location from its new phase. Bosses point to the wide base of international investors and the company’s focus on English-speaking markets, as well as recent reforms to listing rules in the capital.
The sentiment will cheer Rachel Reeves and Jeremy Hunt, both of whom have sought to attract more big companies to list on the London Stock Exchange by overhauling onerous listing rules.
Following a meeting with Saada in Downing Street on Friday, the Chancellor described the French company’s decision to list in London as a “vote of confidence in the UK’s capital markets, the stability we are delivering and our plan for change”.
Saada describes the London Stock Exchange, where he and other executives will be ringing the bell at market open on Monday, as “welcoming”. He plays down concerns about an exodus of companies – most recently the £27bn equipment firm Ashtead – that has driven London below Oman and Malaysia in the global rankings for funds raised through flotations. “Our behaviour is not driven by the behaviour of others,” he says.
Canal+, which last month celebrated its 40th anniversary, will retain its Paris headquarters and French tax structure. Nevertheless, the decision to list in London has drawn the ire of Emmanuel Macron’s floundering government.
Saada says: “We have not felt that the regulatory and the tax environment is favourable to nourishing, to helping nurture, champions like Canal+, which is trying to establish itself as one of the leading entertainment companies in the world and, for sure, the only French player that can hope to reach that status.”
He points to a number of recent disputes with French authorities, including a potential €655m VAT bill and the decision by regulators not to renew the broadcasting licence of Canal+’s news channel C8. The company has said it will pull its four pay-TV channels from terrestrial TV next year in retaliation.
The London listing forms part of a broader break-up of Vivendi aimed at removing what the company describes as a “conglomerate discount” that has left the entire group valued at less than €9bn. Advertising agency Havas will list in Amsterdam, while publishing division Hachette will remain in Paris.
The move has attracted some criticism, with activist investor CIAM warning that the de-merger will allow Bolloré, who owns just under 30pc of Vivendi, to tighten his grip on the group without needing to mount a full takeover. Police had to intervene to remove anti-Bolloré protesters from outside a shareholder meeting last week.
Vincent Bolloré‘s media empire has been a frequent target of protests in France - Abdul Saboor/Reuters
Saada shrugs off these concerns and insists he is happy to have the billionaire media mogul as his main shareholder. More than 97pc of investors voted in support of the break-up.
Yet there are also concerns in France over the growing political influence held by Bolloré, a staunch Catholic from Brittany whose fortune originates from maritime freight and manufacturing paper for Bibles and cigarettes.
The 72-year-old, who also owns weekly newspaper Le Journal du Dimanche, radio group Europe 1 and glossy magazine Paris Match, has been accused of bolstering the far Right in France through his outlets’ support of Marine Le Pen’s National Rally.
The decision to end C8’s broadcasting licence came after the channel racked up €7.6m of fines for various breaches of the broadcasting code, including airing conspiracy theories and misinformation. CNews, another Canal+ channel that is widely seen as France’s answer to Fox News, has also attracted controversy for its opinionated programming.
Saada, dressed in suit braces and tortoise-shell glasses, exudes confidence in his company. But on this subject, he is inconsistent.
The Canal+ boss trumpets C8 and CNews as two of the most popular terrestrial channels in France and puts their success down to “freedom of expression”. He brands the regulator’s decision “unheard of”, adding: “I will not even try to understand that decision. It doesn’t make any sense.”
But asked about the political risks of these channels, he plays them down as a “very insignificant part of the business”.
“We don’t intend to amplify. We don’t intend to replicate that model anywhere else in the world,” Saada says. “This is a historical asset that we turned around – that’s it. We are an entertainment-focused company.”
This focus on entertainment has undoubtedly been lucrative for Canal+. Once purely a pay-TV group best known for carrying the rights to Ligue 1 football, the company has successfully transitioned into the streaming era.
It has moved almost all its customers onto the MyCanal platform, which bundles streaming services such as Netflix and Apple TV+ in a strategy dubbed “super-aggregation”. Younger viewers are enticed with cheaper deals through a package known as “Rat+”, a reference to French slang for a stingy person.
To UK viewers, the platform will appear most similar to Sky’s TV services, though executives are quick to play down this comparison.
“Our strategy is very different from Sky,” says chief financial officer Amandine Ferré. “We really choose not to be competitors of OTT [over-the-top] streaming platforms, but to partner with them. This was quite an important insight for us, because when we did the roadshow we realised that for US investors our position is very different from everything that they know.”
Bosses describe their approach to content – whether that be films, TV shows or sports rights – as “pragmatic”.
Amandine Ferré, Canal+’s finance boss, says the company’s approach to content differs fundamentally from streaming platforms - Patrick Gaillardin
“It’s not emotional decisions. It’s quantitative decisions based on how much it’s going to cost,” says Saada. “We don’t believe in strategic decisions. We only believe in economic decisions – data-driven, cost-driven.”
This policy has led to some eyebrow-raising moves. Following a row over prices, Canal+ opted not to bid for the latest package of Ligue 1 rights, ending a four-decade relationship. (Subscribers will still be able to watch some games thanks to the company’s deal with BeIN Sports.)
Canal+ will also not renew its deal with Disney+, meaning viewers will lose access to the House of Mouse next year.
Saada is sanguine, arguing that the company’s detailed viewer data means it knows how much it is prepared to pay for rights. “I think the number one way to drive your company to the ground in our business is to overspend,” he says.
The Canal+ boss is also wary of being overly reliant on a handful of deals. Diversification helped the company during the pandemic, with the company’s catalogue of films offsetting the sports blackout. Similarly, its European series helped avoid a drought during last year’s Hollywood strikes.
Another differentiator for Canal+ is its global reach. It has a foothold in more than 52 countries worldwide, with around 60pc of its subscriber base of 27m now outside France.
The company is in the process of completing a $3bn acquisition of MultiChoice, Africa’s largest pay-TV operator, that will massively expand its customer base on the continent. It also holds significant stakes in Hong Kong-based streaming service Viu and Nordic pay-TV operator Viaplay.
Jacques du Puy, who leads Canal+’s international operations, says: “It was very clear that this group, if it wanted to survive, had to try to find some growth outside mainland France.”
Canal+ has made some big-budget international shows, known in the industry as “tentpoles”, including last year’s drama series Spinners, which was filmed in South Africa. But the company emphasises its focus on smaller-scale local content, often made in local languages. These shows, bosses say, avoid the clichéd pitfalls of the likes of Netflix’s Emily in Paris.
Du Puy says: “Netflix is producing content in Africa, but let’s say content with Western production value, so more expensive, obviously, and they are not really targeting as we do, they are not really ultra-local.”
While this strategy is primarily aimed at winning over audiences in growth markets such as Africa, where Canal+ is also deploying broadband, Du Puy hopes that in time local programming could have wider appeal. He cites the example of the recent surge in popularity of South Korean film and TV exports.
“There is an opportunity, because there are a lot of stories in Africa, if you put more money to increase the production values, and then that content can start to travel outside Africa,” he says.
Ultimately, Canal+ aims to expand into a truly global media group with as many as 100m subscribers.
Closer to home, bosses are hoping to leverage the success of their production business StudioCanal after Paddington in Peru pulled in blockbuster numbers.
The film achieved the highest opening weekend box office since No Time To Die, the latest Bond film released in 2021, and takings are now approaching £30m. StudioCanal also controls merchandise for the franchise, has launched an immersive experience and will open a West End musical next year.
The commercial success of Paddington In Peru is StudioCanal’s latest coup in English-language cinema
The French company is also behind the Shaun the Sheep series, while its back catalogue of 9,400 titles provides fertile intellectual property for further adaptations.
Anna Marsh, the New Zealand-born media executive who leads StudioCanal, says: “We’re definitely focused on ramping up production, both on the TV series and the feature film side.”
StudioCanal, which is behind films including the Bridget Jones series and this year’s Amy Winehouse biopic Back to Black, sells its productions to third-party streaming and media companies, as well as feeding the wider Canal+ group.
While Canal+ is keen to emphasise its organic growth, the company has proved its appetite for acquisitions, and further deals are undoubtedly on the way.
Canal+ grew its revenues by 3pc in the first nine months of the year to €4.7bn. It is profitable and will have a relatively modest debt pile of €400m after the listing. Bosses say this puts it in a good position to consolidate. Canal+ is also expected to use its London-listed shares to help fund transactions.
StudioCanal boss Anna Marsh says the company is planning to ramp up production - Patrick Gaillardin
The company already has an option to increase its stake in Viu to 51pc, while taking full control of Viaplay may also be an attractive option.
Saada is coy about a potential move into the UK market, however. Sky saw its losses double to £224m last year as it struggles with the shift to the streaming era. Meanwhile, bidders are reportedly circling ITV and its booming production business. Could either of these be appealing takeover targets for Canal+?
“Not today,” Saada says, deploying a favoured phrase he claims to have borrowed from the video game Call of Duty. It is the cautious approach of an ambitious chief executive reluctant to rule anything out.
Canal+’s anticipated valuation would comfortably place it in the FTSE 100 when it joins the London market. However, the company’s decision to remain incorporated in France means it is unlikely to be eligible for the blue-chip index.
Ferré stresses that the company is committed to London, however. “We don’t think this is short-term,” she says. “We really believe in long-term.”
Whatever happens, Saada is hoping to send a clear signal to Macron.
“I have no doubt that in two, three years the market will value Canal+ much more than what it represents today,” he says. “Even if we fail – I don’t think we will – the message to the French authorities is to treasure your national champions. We don’t feel it’s happened in the past.”
