Canal+ VAT rise would cost €200m a year. Its film deal is €196m

Canal+'s agreement with French cinema, signed at the end of July, commits €980m to French and European films over the five years from 2028. That is €196m a year. The VAT rise in France's draft 2027 budget would cost the broadcaster up to €200m a year, on its own estimate. Set the two numbers side by side and the measure stops looking like a tax on a pay-TV company. The state would collect, almost to the euro, the sum French cinema was promised.

That arithmetic is why more than 170 filmmakers published an open letter in Le Monde on Wednesday, among them Emilia Pérez director Jacques Audiard, Anatomy of a Fall director Justine Triet, Claire Denis and the two-time Palme d'Or winners Jean-Pierre and Luc Dardenne. The budget, they wrote, "risks causing an unprecedented disappearance of French cinema from our screens", with 400 films going unmade over five years, Screen Daily reported. The 400 figure has travelled a long way since Wednesday. The mechanism behind it has barely been explained anywhere, and the mechanism is the story.

The clause doing all the work

French film finance runs on obligations, and Canal+ carries the largest private one, a role it has played since the channel launched in 1984. Under France's media chronology, the ladder of release windows every film has to climb, Canal+ gets films six months after their cinema release, far ahead of the streamers and free television, because it pays for the privilege. The July accord renewed that bargain, Deadline reported: it replaced a €480m deal covering 2025 to 2027 and roughly doubled the annual commitment, around 100 co-productions a year, from January 2028.

The deal has an escape hatch, and it was never hidden. Canal+ chief executive Maxime Saada has said publicly that the reduced 10% VAT rate on pay-TV subscriptions is the first clause of the commitment, the quid pro quo for funding cinema, and that the contract is void if the standard rate is applied, Variety reported. Then the budget landed. Unveiled on 1 October, it proposes scrapping the 10% rate and moving pay-TV subscriptions to the standard 20%, part of a plan to bring France's deficit down from 5.4% of GDP.

"We cannot absorb 200 million euros," Saada told RTL in early October, warning of higher subscription prices, internal savings and, if the rise goes through, financing for "maybe three quarters fewer films", per Euronews. Canal+ has called the measure a "direct attack" on its French business. You can read all of that as a negotiating posture if you like. The clause says it is also, simply, the contract.

What 80 films a year actually removes

The letter's signatories put the loss to film creation at €750m between 2028 and 2032, which they translate as 400 films, or 80 a year. The CNC's own production count gives that figure its scale. France approved 290 films in 2025, the CNC reported, so the letter is describing the disappearance of more than one film in four. Measure it against the 228 films of French initiative and it is closer to one in three.

The per-film maths says which films. €750m across 400 films is under €1.9m each, and €1.9m is not a star vehicle. It is a first feature, a documentary, a small regional drama, the bottom rung that the French system finances on purpose and that almost nobody else finances at all. The top of the market will be fine.

Canal+ was already tightening before any of this. It put €155.6m into French film production in 2025, down 13.7% on the year before, out of €1.37bn invested across all approved films, per the CNC's study.

And the private pillar is one of two. The same budget takes another €47m from France Télévisions in 2027, and the letter warns of amendments that would let the state draw directly on the CNC's funds. The signatories' own framing is that French film finance "rests on two pillars, one public and the other private". The bill leans on both at once, which is why the letter reads less like lobbying and more like a structural complaint from a sector that supports around 260,000 direct and indirect jobs.

Governments keep arriving

It has been quite a week for governments reaching into the film and television business. In Britain, culture secretary Lisa Nandy signalled she is minded to intervene in Sky's £1.6bn bid for ITV. France's version is less glamorous, a line item in a finance bill, but the sums are bigger and the effect would arrive faster, because it works through a contract that switches off by itself.

The home-market strength the French system buys is real. French films account for about 40% of domestic admissions, per Screen Daily, the kind of local share most of Europe envies, and the kind Spanish cinema flashed last month when La Bola Negra outsold Avengers: Endgame 3.6 to 1 in its home market.

Which is what makes the Treasury's position so odd. A finance ministry that charges one broadcaster €200m a year and, in the same stroke, releases it from €196m a year of film spending has not really raised new money. It has moved cinema's money to the exchequer and called it revenue.

The National Assembly began debating the budget on Tuesday, and the government holds a majority in neither chamber, with the 2027 presidential election making every vote harder to assemble. The filmmakers are asking MPs for a specific trade: keep the 10% rate, in exchange for binding commitments to invest in French production. The accord the VAT rise would void is due to start paying on 1 January 2028.