Series of costly losses in 2023 contributed to Just for Laughs insolvency, report says
An underachieving comedy festival in England and attempts by Facebook and YouTube to compete with the increasingly popular TikTok are among the factors that led revenue to plummet at the Just for Laughs festival parent company last year, a Quebec Superior Court filing suggests.
The report dated Thursday from insolvency trustee PwC, formerly known as PricewaterhouseCoopers, lists the circumstances that left Groupe Juste pour rire inc. unable to pay its debts.
The company announced this month that it would cancel its flagship Montreal comedy festival this year and seek protection from its creditors. It also cancelled Just for Laughs Toronto.
The court filing shows Groupe Juste pour rire booked a net loss of more than $7.9 million in the first 10 months of 2023. A series of expensive endeavours contributed to the situation.
A March 2023 comedy festival in London led to a loss of around $800,000 after ticket sales fell short of expectations. In response to sponsor dissatisfaction with the 2022 edition of Montreal Just for Laughs, Groupe Juste pour rire knowingly staged the 2023 festival at a loss that would ultimately total around $2 million as it attempted to match the scale of the event before the COVID-19 pandemic, the trustee said.
A production of the musical comedy Hair was another costly enterprise, though the report does not specify the extent of the resulting financial hit.
The report said Groupe Juste pour rire was dogged by several disadvantages. Bans on live events during the pandemic had a “serious negative impact,” the trustee said. The company cited post-pandemic inflation and associated “unprecedented financial strains” as other lasting challenges.
Changes to YouTube and Facebook video monetization rules favouring short videos akin to TikTok reels led to a reduction in revenue from the group’s mostly longer-form content, the filing said.
Finally, the TVA Groupe’s decision not to purchase the 24th season of the company’s prank comedy television show Gags deprived it of licensing revenue that the trustee said previously totalled $550,000.
A spokesperson for Groupe Juste pour rire declined to comment on the court filing. The company said in a March 5 statement that it would undergo restructuring to improve its financial health and hoped for a return of the Montreal and Toronto Just for Laughs festivals in 2025.