As the mergers continue, Disney answers the AOL Time Warner and Viacom call and grows for the first time since the 1996 Capital Cities/ABC merger. On Saturday, July 21, 2001, the LA TIMES Sallie Hofmeister reported that the Walt Disney Co. will buy Fox Family for $3.3 billion plus assume $2.1 billion of the troubled ventures debt. Long in the rumor mill, this new acquisition is supposed to be final and announced within a few days according to Ms. Hofmeisters sources. Obviously the true value for Disney in this deal is obtaining the fifty international Fox Family channels.
Acclaim Entertainment, Inc. has announced profitable results of US$0.2 million in earnings before an extraordinary gain on net revenues of $38.6 million for its third fiscal quarter ended June 2, 2001. These profits were achieved before the gain of $7.1 million, or $0.12 per diluted share, from the early retirement of $13.9 million principal amount of the 10% convertible subordinated notes.
Tele Munchen Group (TMG) has made an offer to buy out CEO and co-founder Thomas Haffa's 43% share of EM.TV. The offer is reported at DM250 million (US$109 million). However, media giant Kirch Group reportedly has a first-look option for Haffa's stake after it bailed out the troubled company by purchasing a 25% stake this past spring. Former EM.TV exec Nickolaus Becker, who pushed a TMG bail out over Kirch, is shepherding TMG's proposal for Haffa's share. Currently, EM.TV holds a 45% stake in TMG, but it has to sell it in order to get regulatory approval for its alliance with Kirch.
San Francisco-based Western Images is restructuring to focus solely on visual effects, CGI, design direction and creative editorial services. Facility services, which include the linear edit suite, Henry, telecine and video service bureau, will be retired. In addition, the company will expand its efforts in long-form broadcast and feature film effects. As a result of the restructuring, five people were laid off. Four were related to fax work and the fifth was executive producer Ken Solomon. "Kenny (Solomon) worked very hard and was very good.
Film Roman has announced that it is stopping its live-action feature development division. Feature division president Mitchell Solomon and production VP David Jung have been let go and their responsibilities have been given to Film Roman president/CEO John Hyde and TV president Peter Schankowitz. This move marks Film Roman's desire to refocus on its core animation business. No word was given on how this decision will affect the live-action projects already in production including the adaptation of the TV series THE GREATEST AMERICAN HERO for Disney.
Mainframe Entertainment, Inc. has announced its best financial results ever. For the fiscal year ended March 31, 2001, the Vancouver-based company reported earnings of CA$2.4 million or $0.14 per share compared to $0.84 million or $0.05 per share for the year ended March 31, 2000. As expected, Mainframe delivered a total of 50 television episodes (27 episodes of HEAVY GEAR and 23 of ACTION MAN) as well as its first direct-to-video, CASPER'S HAUNTED CHRISTMAS. The firm recorded revenues of $39.9 million compared to revenues of $32 million for the previous year.
Avid Technology, Inc. has announced a lower outlook for its second quarter financial results. As a result of weakened economic conditions globally, revenues for the second quarter ended June 30, 2001 are projected to be below previous expectations and in the range of US$108 to $111 million. Avid's European video business and the company's worldwide audio business have been most impacted by the slowing economy, with both experiencing reductions in revenue over last year. As a result of the reduced revenue, gross profit will be lower than originally expected.
A Warner Bros. spokeswoman announced that AOL Time Warner will close all of its U.S.-based Warner Bros. Studio Stores by the end of October. The move will cut another 3,800 jobs from the mega-firm and is attributed to the company's failure to find a buyer for the troubled chain store. At its peak there were 130 stores worldwide. "We're in a wind-down process," a Warner Bros. spokeswoman said. "Management decided to get out of the owned and operated retail business."
Alias|Wavefront has announced a strategic alliance with mental images, makers of the world-renowned, mental ray renderer. The two companies will work together to develop a mental ray rendering option for Maya. "Image quality is a top priority to CG industry professionals," explained Peter Mehlstaeubler, vice president of product development at Alias|Wavefront. "With this priority in mind, Alias|Wavefront has pursued an aggressive rendering development path, one which will soon be expanded to encompass a mental ray solution.
Ubi Soft Entertainment, an international developer and publisher of interactive games, surpassed its predicted sales growth of 25% for the fiscal year ended March 31, 2001. Ubi Soft reported net consolidated sales of US$236 million (259.8 million euros) up 39.4% over the previous year. This growth came in spite of a 5% decline in the video games world market for the same year. Net income for Ubi Soft during the fiscal year decreased to $4.2 million (4.6 million euros). This was attributed to slow sales in the next generation market.
d-2, a Dallas-based interactive, multimedia and Web development firm, has formally announced its grand opening and spin-off from its former parent, D Animation, one of the most successful interactive, multimedia and Web development firms in Texas, having served over 300 clients, including American Airlines, Canon, Anderson Consulting and Nortel. d-2 began operations on February 15, 2001 and is currently on track to exceed $2 million in yearly billings. d-2 will focus its business services on the real estate, telecommunications, technology and manufacturing industries. Darjon R.
San Franciscos animation studio Wild Brain, Inc. is expanding its global operation with the launch of a subsidiary in Munich, Germany. Wild Trixx Media GmbH will identify co-production partners for television and feature film projects, coordinate sales and merchandising for the companys future and existing programming, such as Wild Brains new 26-episode series POOCHINI, throughout Europe, and attract European-based commercials.
Licensing proves to be a viable and growing industry, according to the most recent study sponsored by the International Licensing Industry Merchandisers Association (LIMA), in conjunction with the Yale School of Management and the Harvard Business School. According to the report, property and trademark owners received royalties of $5.84 billion from manufacturers who paid for the right to use trademarks, characters, logos and artwork to sell products in the United States in 2000, representing a $248 million increase (4.4%) in the last year.
The Harvey Entertainment Company announced on June 26, 2001 that they have completed their sale of Harveys classic cartoon characters, contracts and related assets, to Classic Media, LLC, in exchange for approximately US$17,000,000 and the assumption of certain liabilities. Actual funding of the transaction took place on Friday, June 22, 2001. Harvey has also officially changed its name to Sunland Entertainment Co. Inc. with the new OTC Bulletin Board stock symbol of SUNE. The name and stock symbol change will take effect Wednesday, June 27, 2001.
CINAR Corporation announced that it has reached an agreement with Telefilm Canada to make full restitution for all investments and other financial subsidies made by Telefilm Canada in CINARs productions that have been decertified, or for productions for which final certification will not be granted by the Canadian Audio-visual Certification Office (CAVCO). Under the terms of the agreement, CINAR will repay Telefilm Canada approximately $2,594,000 in full reimbursement of investments and subsidies including interest.
DIC Entertainment Holdings, Inc. has entered into an agreement to purchase the assets of Golden Books Family Entertainment, Inc., in a deal valued at $170 million. The deal entails a Chapter 11 bankruptcy filing by Golden Books and its domestic subsidiaries, with DIC petitioning to purchase the companys assets. Golden Books operations will continue as usual during the court and sale process, which is expected to take approximately 60 days. Golden Books assets are quite extensive.
Midway Games Inc. has announced that as a result of decreasing demand in the coin-operated arcade videogame market, it is getting out of that business. The company is now focusing its game development efforts exclusively on games for next-generation home videogame platforms, including the PlayStation 2, Xbox, Nintendo GameCube and Game Boy Advance. The move is expected to mean a layoff of fewer than 60 people, and a primarily non-cash pretax charge of less than $8 million in the quarter ending June 30, 2001.
According to a June 21, 2001 report in the Los Angeles Times, Ben Stein, host of the Comedy Central TV game show "Win Ben Stein's Money" has sued Shockwave.com for breach of contract. In the suit, filed in Los Angeles County Superior Court, Stein claims he is owed $212,250 for his work in helping to develop an online quiz show. In exchange for the use of his name, voice and likeness, Stein reportedly was to receive 75,000 shares of Shockwave stock valued at 50 cents a share, with an option to sell back the stock at nearly $3 per share. The show has yet to launch on the Web.
In an effort to maximize shareholder value, The Harvey Entertainment Company announced on June 18, 2001 that it has retained the investment banking firm of Houlihan Lokey Howard & Zukin to explore strategic alternatives and opportunities, following the completion of its pending transaction with Classic Media LLC. Founded in 1970, Houlihan Lokey Howard & Zukin provides a wide range of services including mergers and acquisitions, private placements and other financial advisory services. The firm is ranked among the top 10 financial advisors in U.S. mergers and acquisitions under $500 million.
In an announcement made June 20, 2001, by Michael D. Eisner, chairman and CEO, and Robert A. Iger, president and COO, of The Walt Disney Company, Peter Schneider will step down as chairman of The Walt Disney Studios to start a new Broadway theater production and investment company funded in part by Disney.
DIC Entertainment has signed an exclusive North American home video distribution deal for its extensive library of animation with Lions Gate Home Entertainment. This move marks the first deal for DIC's Worldwide Home Entertainment division since CEO Andy Heyward, along with Bain Capital, purchased DIC back from Disney in November 2000. The first releases on VHS and DVD slated for August are SABRINA, THE ANIMATED SERIES and MUMMIES ALIVE! Other titles set for release include MADELINE, SONIC THE HEDGEHOG, CARMEN SANDIEGO, INSPECTOR GADGET and ACTION MAN.
London-based production company Stink has launched Skunk, a new animation house producing music videos, commercials and short films. The first project for the new company will be three spots for whisky brand Famous Grouse via ad agency Abbott Mead Vickers. Prague-based director Michal Zabka will helm the spots.
Hypnotic and Nibblebox have announced they have completed their merger and closed a second round of financing. The new round of financing was led by Hypnotic's initial investor Vivendi Universal and the media group Dresdner Kleinwort Capital, as well as Nibblebox's initial investors, Knowledge Universe, Windsor Media and Entertainment Media Ventures.
As widely reported today by sources such as the LA TIMES, WIRED MAGAZINE and REUTERS, four people, including Stan Lee Media co-founder Peter Paul, have been indicted by federal prosecutors as part of an alleged $25 million stock manipulation scheme. The defendants face maximum sentences of 15 years in prison if convicted. Paul, former Stan Lee Media executive vice president Stephen Gordon, stock analyst Jeffrey Pittsburg and stock promoter Charles Kusche, have been accused of securities fraud in an attempt to manipulate the price of Stan Lee Media stock.
Mainframe Entertainment has announced its expansion into the consumer products area with a new strategic alliance with licensing and merchandising veteran Joy Tashjian. Previously with American Champion Marketing Group, Tashjian launched successful consumer product campaigns for many ABC Saturday morning television series. With American Champion shifting its focus away from the traditional entertainment business, Tashjian has formed her own agency, Joy Tashjian Marketing Group, with many of the staff from American Champion.