Just for Laughs Insolvent | The 2023 edition in deficit despite millionaire subsidies

The Just for Laughs Group (JPR) lost millions of dollars last year by presenting a comedy festival in London as well as its big summer event in the metropolis even knowing that the event – ​​which obtained 3 .3 million in government subsidies – would result in a significant deficit. Everything collapsed last year for this now insolvent comedy giant.

This is what emerges from the report written by controller Christian Bourque, of the PwC firm, who is supervising the legal restructuring of the group, which placed itself sheltered from its creditors on March 5 under the Bankruptcy and Insolvency Law.

The document lifts the veil on the finances of JPR, present in niches such as festival organization and television production, in addition to identifying a series of events and business decisions that precipitated its fall. The net loss amounted to 8 million in 2023, while its revenues were around 28.5 million.

On a scale comparable to the editions before the pandemic, the Just for Laughs festival which was held last July – and which coincided with the end of the traditional galas – caused the company to lose 2 million.

“This decision was taken into consideration of the 2022 edition of the festival which had not been satisfactory in the eyes of the various sponsors,” writes Mr. Bourque. The group made this decision knowing that a loss would result and that it was a strategic decision. »

A few months before, in April 2023, the group sunk $800,000 into a comedy festival in London, United Kingdom, organized in partnership with the European division of American entertainment giant AEG Worldwide. According to PwC, the investments, which are not quantified, were “significant” and ticket sales were “below” expectations. These two events were much more expensive to organize in the inflationary context after the pandemic.

It was not possible to speak with JPR on Thursday. Patrick Rozon, chief creative officer, did not respond to a message sent by The Press. Public relations firm National, which represents the group, had not commented at the time of writing.

Other hard blows

Alongside these business decisions, three other events greatly weakened the finances of JPR – owned by Bell, Groupe CH and Creative Artists Agency. Audiovisual and distribution revenues plunged by at least 35% after changes decreed by Facebook and YouTube on their respective platforms, underlines PwC. These changes favored the presentation of videos in short format (real), while the content of the Quebec humor specialist is focused on longer formats.

“This source of income, which generated 3.5 to 4 million [bénéfices par année]has been significantly weakened,” underlines Mr. Bourque.

For their part, the revenue generated by licenses of Gags were cut by $550,000 when TVA Group decided not to buy the 24^e season of this series. Finally, ticket sales for the musical Hate were “significantly lower than expectations”, which led to other notable losses, according to the controller, who does not quantify them.

In filing for bankruptcy last week, JPR justified its decision by pandemic interruptions, inflationary pressures and difficulties in the media industry. The organization was nevertheless able to reap a profit of 1.2 million in 2022.

According to the PwC update, JPR’s receivables amounted to 49 million as of October 31. As revealed The Press last week, ex-president and founder Gilbert Rozon is still waiting for a sum of 15.6 million. This is a balance of payment arising from the sale of the company for 65 million in 2018. There is no guarantee that the fallen businessman will recover this money.

When it sought protection from its creditors, the company was in default with the National Bank, its main secured creditor. Last fall, only $865,000 remained in JPR’s coffers. Interim financing of 1.8 million, which will be granted by the National Bank, is necessary to ensure the continuation of activities for a few more months.

Quick auctions

In his report, Mr. Bourque announces his intention to ask the Superior Court of Quebec that the procedures now take place under the Companies’ Creditors Arrangement Act. This will bring together JPR’s various entities away from their creditors to facilitate the investment solicitation and sale process, meaning the organization could be sold in one piece or in pieces.

According to the timetable appearing in Mr. Bourque’s report, the fate of JPR could be sealed in the week of May 13. It is at this time that the successful bids for the group or certain of its assets must be finalized.

This Friday, PwC is due to kick off the auction process. The first offers are expected to be received no later than April 8 – in about three weeks.

Minority shareholder of ComediHa!, Quebecor, which negotiated with Mr. Rozon in 2017, did not respond to an email from The Press aimed at knowing whether the conglomerate would again be interested in JPR’s assets. Founder of the Montreux Laughter Festival and president of GF Production, Grégoire Furrer also showed interest in the Quebec company when its founder wanted to get rid of it. Now based in Quebec with the Exclam festival, Mr. Furrer seems to have changed his mind.

“I invested a lot of money to settle in Quebec,” he said, in a telephone interview with The Press. We have a brand that is small, only a year old, but it is ours. We can invest in our property or take back a damaged brand and reinvest millions to make it sexy again. You would have to be crazy not to choose the first solution. »