BREAKING: In a major move that redefines STX Entertainment’s place in the distribution landscape and decimates the distribution pipeline RED, STX Motion Pictures Group has made a three-year deal with EuropaCorp Films USA to release and market the upcoming films hatched by Luc Besson’s production entity. That includes EuropaCorp’s biggest gamble, the Besson-directed Valerian and the City of a Thousand Planets, the most fiscally and creatively ambitious film in that hit-making director’s career, at around a $180 million budget. The deal was announced by Adam Fogelson, Chairman, Motion Picture Group, STX Entertainment, and Marc Shmuger, EuropaCorp CEO.

That leaves RED close to dead. Sources said that the impact on the distribution company will be immediate and dramatic with everyone being laid off today — about 50 staffers. This follows two distribution people who resigned over the holidays, meaning that RED becomes a skeleton ship. RED will continue to exist as a shell, but only because contractually EuropaCorp cannot easily pull out of the deal. At least they paid their employees through the holiday unlike Relativity which both laid off employees and put others on furlough right before Christmas (and we hear another month of furlough is coming). We are waiting for any comment from Relativity and will update if they comment.

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This comes after months of tension and strained relations between Relativity and EuropaCorp. RED is half owned by both companies, used for the film releases generated independently by each. Reports of Relativity not living up to its end of the bargain have been widespread. According to one source, this put Besson’s back against the wall. “They had this agreement with RED, but Relativity wasn’t paying its bills or paying at the 11th hour, and this has gone on for six months. Imagine having a partner like that when you have movies in the pipeline,” said the source. “So EuropaCorp had to cover all the bills and overhead, itself. When you have movies you want to release, it is hard to work under those kind of circumstances.”

Given this, it makes sense Besson and his EuropaCorp would not want to leave anything to chance when it has so much riding on its upcoming slate. The previous films have not very well but, to be honest, the marketing and distribution team had little to work with — Nine Lives was ravaged by critics and Shut In had a C CinemaScore. John Madden’s fast-moving, Jessica Chastain-starrer Miss Sloane (with an A- CinemaScore) was trying to figure out its identity instead of embracing the anti-gun element of the film early on. The marketing of that film (which was an acquisition) was considered a Shmuger misstep.

EuropaCorp is now run by Shmuger and STX’s Motion Picture Group by Adam Fogelson, who worked together at Universal. They’re both experienced in launching a movie as big as Valerian, which bows July 21. That film will be among the first four films STX will release domestically for EuropaCorp. It stars Dane DeHaan, Cara Delevingne, Clive Owen, Rihanna, Kris Wu, John Goodman and Ethan Hawke, and is based on the comic strip Besson revered as a child.

However, there are two other films to release before Valerian. The first under the new deal hopes to be the James Ponsoldt-directed The Circle, starring Tom Hanks, Emma Watson and John Boyega. The companies are eyeing an April release but sources said the film is undergoing reshoots this month, so the time might be tight.

There is also the Lone Scherfig-directed Their Finest, a romantic comedy-drama set in World War II Great Britain starring Gemma Arterton, Sam Claflin and Bill Nighy. That film is set for release right now on March 24 with plans for it to be shown at the upcoming Sundance and Santa Barbara film festivals late this month and early next.

The last of the first batch is Renegades, a visceral heist adventure written by Luc Besson and Richard Wenk and directed by Steven Quale, starring Sullivan Stapleton and J.K. Simmons.

Fogelson called Besson “a visionary entrepreneur, storyteller and filmmaker and we are enormously excited to be working with him and his entire team releasing Europacorp’s slate of motion pictures in the United States. Additionally, Marc Shmuger is not only a gifted executive but a friend to many in our company. Together we’ve enjoyed great successes in the past, and we all share a marketing shorthand that will make this an especially potent partnership.”

Said Shmuger: “STX Entertainment’s Motion Pictures Group is the perfect home for EuropaCorp’s films. They bring the highest level of studio expertise to the marketing and distribution process, but they also bring an energy and nimbleness not found in a traditional major studio. This could not be a better fit for us.”

Besson formed RED because it seemed like the logical next step, to control the marketing and distribution fortunes of the films he creates, writes, produces and directs. Pictures like Lucy and Taken have been bonanzas for studios like Universal and Fox. This will be a different set up, but it brings Besson’s creations in one place. Said Besson: “We can’t wait to get started on this partnership with our friends at STX. I worked with Adam when he championed Lucy at Universal, and I have great faith in him and the marketing and distribution team.”

Alongside its new arrangement with STX, EuropaCorp will maintain its 50% ownership of RED, the marketing and distribution joint-venture it formed in 2014.