Report Attributes Just for Laughs Insolvency in 2023 to Multiple Expensive Losses
An underperforming comedy festival in England and efforts by Facebook and YouTube to compete with the increasingly popular TikTok were factors that contributed to a significant drop in revenue at the Just for Laughs festival parent company last year, according to a filing in the Quebec Superior Court.
The report, dated Thursday and prepared by insolvency trustee PwC (formerly known as PricewaterhouseCoopers), outlines the circumstances that led Groupe Juste pour rire inc. to be unable to meet its financial obligations.
Earlier this month, the company announced the cancellation of its main Montreal comedy festival for this year and declared its intention to seek protection from creditors. Additionally, Just for Laughs Toronto was also called off.
The court document reveals that Groupe Juste pour rire recorded a net loss of over $7.9 million in the first 10 months of 2023. Several costly ventures played a role in this situation.
For instance, a comedy festival held in London in March 2023 resulted in a loss of approximately $800,000 due to lower than expected ticket sales. The company also knowingly operated the 2023 Montreal Just for Laughs festival at a loss of around $2 million to address sponsor dissatisfaction with the 2022 edition and to match pre-pandemic event scale.
Additionally, staging the musical comedy “Hair” was another expensive endeavor, although the report does not specify the financial impact of this production.
The filing also mentions that Groupe Juste pour rire faced challenges from various factors. Restrictions on live events during the pandemic significantly impacted the company. The post-pandemic inflation and financial strains were highlighted as ongoing issues in the trustee’s report.
Furthermore, changes in YouTube and Facebook video monetization policies that favored shorter videos similar to TikTok reels led to a decrease in revenue from the company’s predominantly longer-form content.
Finally, the decision by TVA Groupe not to acquire the 24th season of the company’s prank comedy TV show “Gags” resulted in a loss of licensing revenue that previously amounted to $550,000.
A spokesperson for Groupe Juste pour rire declined to provide a comment on the court filing. The company indicated in a news release on March 5 that it would undertake a restructuring process to enhance its financial stability and expressed hopes for the return of the Montreal and Toronto Just for Laughs festivals in 2025.
