Fred Kogel, chief executive of Leonine Studios, Germany’s leading independent distribution and production company, is upbeat about the merger of Paramount and Warner Bros. Discovery, now part of Skydance. Variety spoke to him about how the merger is likely to affect the film and TV landscape in German-language territories.
One of the commitments made by Skydance chief David Ellison when he was pushing for the merger was to produce 30-plus movies a year. Kogel is confident that Ellison will deliver.
“What gives me confidence that the number [of movies] will be delivered is that David Ellison comes from a content background and produced great movies with Skydance in the past,” Kogel says. “He is a businessman and a creative guy. He loves the business and he loves making movies.”
Kogel points to Ellison’s track record as a producer as evidence to support this. “Knowing the production business and knowing the theatrical business, I know what it means to increase the number of theatrical movies,” he says. “It’s a hard feat to achieve. You need long-term development. You need enough projects in the pipeline to build that number up. So, I’m optimistic with him and the management that they will deliver on the number of films.”
Does Kogel have any concerns about Skydance’s viability, in light of its sizable debt burden?
“In my opinion, Skydance is a group with extraordinary assets, IPs and possibilities,” he says. “I have complete trust in the people running Skydance. I admire David Ellison because he is an entrepreneur and has proven [his abilities] in the past. I think David Ellison and Ynon Kreiz are a very strong team. I also have great respect for Ynon. It requires a vision, a lot of strength and courage, and a great team to achieve what they already have achieved. Of course, it’s a tough market, but it’s a great business to be in. And being the managers they are, I have complete trust that they and their teams can handle this. So, I’m positive. I’m totally positive.”
Kogel sees opportunities for Leonine to produce films for Skydance. “If there is IP that is convincing and that can be produced by us, it could be a natural fit to work with another distributor. That’s what we have already done in the past,” he says.
Leonine could also produce TV drama series for Skydance. “We are already doing good business with HBO Max as a production unit,” he says. “So, for us, it’s always interesting to be a local producer of premium content and to be aligned with a studio like Skydance, and of course we could help.”
He adds, “In general, with production, I think it’s a good development. If you come at it from the side of television production, I think it’s also a positive development for us. I mean, we are doing very good business with HBO Max in Germany.
“HBO Max started [in Germany] at the beginning of the year, and just two weeks ago, we started the first major German original together with HBO Max, ‘Four Blocks Zero’ — the prequel to our very successful TNT series ‘Four Blocks.’ It’s a great production by our banner Wiedemann & Berg Television. It’s a very good collaboration, and additionally we delivered a production by the Beetz Brothers — ‘Clangold,’ the first documentary commissioned by HBO Max in Germany. I see them as a major force in the German commissioning market.
“Local German productions are very important for all streamers and broadcasters to create a long-term commitment from the German audience. Germany is the biggest TV market in Europe and one of the most important markets in the world. And Skydance as a content powerhouse, with its strong services HBO Max and Paramount+, has the power to invest.”
The 30-plus movies a year coming from Skydance could be seen as increased competition for Leonine’s distribution business, but Kogel doesn’t see it that way.
“For me, having been in the distribution business for such a long time, distribution has always been hugely competitive. So, it’s not major news for us,” he says.
“We are a very competitive local distributor that tries to be at eye level with the international majors, so we are accustomed to a lot of competition. In my opinion, every good movie that enters the German market helps the German market, and the theatrical market in general.
“I don’t see it as a major problem. I think as long as the movies are of high quality — and that’s what I expect — then it’s good for the market. And I mean, we see a big trend, especially in Germany, where the 20-25 best films of the year account for the vast majority of the year’s business. And you simply have to be competitive, and, better still, have one or more of the 25 best films of the year, and that also applies to us. That applies to everybody: Warner, Paramount, Sony, Universal — to everybody. So, it’s a competitive market, and as long as there is really good competition, I’m happy. We have to face that competition. So, I don’t mind getting 10 more films a year in Germany. I would be happy if these are the right films, because we need films that draw the audience to the theatrical market.
“We are a strong supporter of the theatrical release market, as Leonine, and I’m really very happy if anybody in the business has that commitment.
“So, our goal is to make the right films that draw people to the cinemas. I think that, with David Ellison and his team’s plans to increase the volume, make quality films, and make audience-pleasing films, we are totally aligned on that.”
So, is it the quality, not the quantity, of the Skydance films that is important?
“Yes, it’s the quality. But in the end, I think in most cases the right films will find their way to the market, and that’s the reason why I answer it from the German perspective,” Kogel says. “You must see that, of the approximately 650 films released in Germany each year, at least 200 are German movies, which means 450 are international movies. So, if 10 more international movies were to find their way to the theaters, and if they were the right movies, it would be good for the theaters.
“For me, it’s a crowded market anyway, and finding the release dates is the most difficult task for our distribution team, as is supporting the films so that they find their way to the audience. We definitely see in the German market that, if we have strong films, other films benefit from that because people will then go to the cinemas. For me, the worst situation is that we have 200 German films and 450 international films and too few must-see movies, which often is the problem, especially with the German productions. So, the discussion for me is not about having 10 more films or 10 fewer films; it’s about having the right films, and if they draw the audience, then that’s a good thing for all of us.”
There may be an opportunity for Leonine to distribute Paramount and Warner Bros. films in German-language countries.
“That could be a possibility. We buy at least 25 international movies and sometimes carve out an international studio movie and release it in Germany,” Kogel says. “I mean, that’s the kind of business we do, but normally it doesn’t happen if a major studio has a huge distribution operation in Germany — as Warner Bros. has — because then they can release it themselves and don’t need us. But sometimes it happens.”
There are advantages to having a merged Paramount+/HBO Max streaming group, Kogel says.
“In the end, I always say it’s good for the whole business if we have strong partners. So, for Leonine, it’s good to have a strong Skydance group in the German market because we can do business with both services. In my opinion in our competitive market the setup will strengthen Paramount+ and that in the end Paramount+ may become a stronger partner under the Skydance banner – at least in the next years. For the moment it’s too early to predict a long-term strategy. But that’s not possible anyway in our business.
“Competition will increase when it comes to the streamers because a strong HBO Max and a strong Paramount+ are stronger contenders against the other streamers than either would be under separate roofs. For example, if they increase the number of movies to 30-plus, there will be more movies on their platforms. We don’t know yet what will happen in the end. But it will, of course, increase competition, which is generally a good thing for everybody who is in the content business and who wants to produce and license great content. So, for me, it’s a good thing.”
Leonine has an advantage over other independents in that it is part of a large group, Mediawan, which is headed by Pierre-Antoine Capton, and also includes Plan B.
“There are, of course, advantages and you have to distinguish between distribution and production. So, in production, we are cooperating in many ways, as we are part of the Mediawan Group, and certain production companies of ours are working closely with production companies within the Mediawan Group. For example: When we produced and released a highly successful German movie called ‘Weekend Rebels,’ it was noticed by Plan B, and together we developed a U.S. version with Plan B, which has now gone directly to Apple. It’s a remake. We work together on co-productions. So, these are very interesting opportunities that Pierre-Antoine Capton and I regularly discuss. What can we do together in non-fiction and fiction, and how can we join forces better?
“When it comes to distribution, I think it’s a different business because distribution is very different from market to market.
“We are constantly talking about possible future cooperations when it comes to movies: If Mediawan has a successful French movie, we are talking about distributing it in Germany.
“It’s good that Leonine, as one of Germany’s biggest distributors, is within the Mediawan group. It’s interesting to look at every movie that comes out of the group to see if we can release it or do a carve-out for Germany, Austria and Switzerland.”
If Warner Bros. and Paramount want to bring more of their production business to Germany, they’ll find that the German production incentive is not as attractive as it could be, Kogel cautions.
“We are not yet where I want Germany to be in the end, where we could benefit from U.S. studios producing more projects in Germany. Why? It’s easy: We don’t have a tax credit system here that meets the standards of other European countries or of possible future U.S. tax credits, under the new plan.
“That’s the missing link for Germany to be truly competitive with the other European territories, which already have a tax credit.”