Just for Laughs debacle | “I couldn’t imagine a disaster like this”

It is “unimaginable” that giants with “almost unlimited financial resources” like Bell and evenko could have allowed the Just for Laughs Group (JPR) to sink, believes its founder and former president, Gilbert Rozon. This giant of humor was driving “towards a wall honking” because of the decisions of its shareholders, says the fallen businessman.

In his first public outing since the company took shelter from its creditors on March 5, Mr. Rozon, who sent an open letter to The Pressdoes not mince his words towards Bell, evenko and Creative Artists Agency (CAA), to whom he blames the JPR debacle.

“I could not imagine a catastrophe like this for the simple reason that these companies have almost unlimited financial resources,” he added in a telephone interview. They had in their hands an international flagship of humor which has existed for 40 years. It was unimaginable to me. »

Bell did not respond to an email from The Press inviting him to respond to the words of the founder of JPR; evenko responded that he did not want to comment.

Spattered by accusations of sexual misconduct, Mr. Rozon sold his company to ICM Partners (49%) – which now belongs to CAA –, Bell (26%) and evenko (25%) five years ago. He has since been acquitted of the criminal charges against him. The pandemic shook JPR, but an unjustified purge as well as constraints imposed by its shareholders placed the humor specialist in an untenable situation, maintains its founder.

The “first shock” came in spring 2018, he said. On the eve of the conclusion of the sale of JPR, several members of senior management were fired. Mr. Rozon’s four sisters and other senior executives, such as chief manager Guylaine Lalonde, are falling by the wayside.

The fall of JPR could cost its founder up to 17 million. This is the balance of the sale price that occurred in 2018, an amount considered to be an unsecured debt. The businessman turned to the courts in hopes of getting paid.

More than inflation

When turning towards the Companies’ Creditors Arrangement Act (LACC), JPR, which carries debts of around 50 million, had attributed its fall to inflation, which inflated its expenses, to changes in the “media industry” as well as to the “difficult times” that free festivals are going through due to the capping of subsidies.

From, The Press revealed that several other elements had come to throw sand into the gears. The leveraged acquisition strategy used by Bell, Evenko and CAA to get their hands on JPR quickly weakened the group because it found itself heavily in debt. In addition, other constraints attributable to Quebec shareholders increased the financial pressure on JPR.

First, JPR had to devote more than half of its advertising budget to Bell’s platforms (radio, television and billboards) even if the telecommunications giant refused to be the main partner of its high mass of humor. Furthermore, evenko demanded commissions of 15% for the sale of sponsorships as well as management fees exceeding 1.5 million for the organization of the Just for Laughs festival.

When evenko acquired 25% of JPR, what revolved around sponsorships was centralized at Spectra. These two specialists in production and venue management are controlled by the CH Group (51%) and the rest belongs to the American giant Live Nation. JPR then found itself under the aegis of a team responsible for selling sponsorships for events entirely owned by evenko and Spectra: Osheaga, the Francos and the Montreal International Jazz Festival, among others.

“If evenko owns 25% of JPR and all of the rest of the events, what will end up at the top of the pile when it comes time to seek sponsorships? asks Mr. Rozon. It is natural in humankind. »

Brand damaged?

Did the three shareholders of JPR acquire a company with a reputation that was difficult, if not impossible, to rehabilitate due to the scandal that killed its founder? A brand “is stronger than its owner,” replies Mr. Rozon when questioned on the subject.

The latter agrees that business could have been more “difficult” in terms of sponsorships in the years following the sale of JPR, before adding that the brand was recognized “internationally”. According to controller PwC, which is overseeing the JPR sale process, the brand was worth 20 million in 2022. Despite losses of 12 million accumulated by the group over the past five years, assets like the show The gags remain very popular, according to the documents sent to potential buyers of the company.

In the Quebec market, however, the founder of JPR is still associated with the humor specialist even though he sold it five years ago. This is the observation made by Mesure Média, which specializes in data analysis to analyze what is said and written in the media on a particular theme. For request of The Pressthe firm has looked into Mr. Rozon’s case since 2017.

“In the cover, every time there is talk of Gilbert Rozon, it is talk of Just for Laughs,” says the president of Mesure Média, Pierre Gince. Overall, this generated, to its own benefit and to the benefit of the brand, a reputation deficit which continually increased. »

The founder and ex-president of JPR did not come forward to try to buy the humor specialist. His fear: to witness a dismantling of the group. He hopes that the company will be bought by a buyer who “loves the brand” and who “understands the French-speaking context”.

Read “The other rocks of Just for Laughs”