Canadian-based TV and film company Alliance Atlantis Communications and Munich-based kids producer TV Loonland have joined to create animated joint ventures. The German producer will supply CA$110 million (US$ 76 million) over the next three years to co-create up to nine new children's series. As part of the deal, TV Loonland will hold all European rights, while Alliance will control the remaining worldwide rights. For an additional $14 million, TV Loonland has acquired European rights to Alliance's portfolio which includes YVON OF THE YUKON.
Fraud troubles for CINAR Corp. increased as RCMP agents seized four boxes of the ARTHUR TV-series producers' tax documents. With a warrant in hand, a joint team from the RCMP (Royal Canadian Mounted Police) and provincial police searched the Old Montreal offices of the Société de développement des entreprises culturelles (Sodec) on the morning of Thursday, April 6, 2000. The search was part of an ongoing investigation launched by the RCMP on October 19, 1999 [AF 10/19/99] after a Bloc Québécois MP made tax fraud allegations in the House of Commons.
On Wednesday, March 29, 2000, Disney lobbyists helped deliver Gemstar's FCC complaint against the America On-Line and Time Warner merger to members of the U.S. Senate and House of Representatives. Gemstar has agreements with TV stations in every market in the U.S., which allows the company to engrave program information into broadcast signals. VCRs equipped with Gemstar's VCR-Plus technology can then decode the signal, making it easier for users to record TV programming.
Montreal-based CINAR Corp. has come to an interim deal with Globe-X Management, which halts the pending lawsuit against the investment firm. The agreement allows CINAR Corp. to look into investments made, without board approval, in Globe-X Management's affiliate Globe-X Canadiana. However, the deal does not finalizes the terms in which CINAR will be able to recover the nearly US$76 million invested in Globe-X. The lawsuit was filed on Monday, March 20, in an attempt to recover the funds, which were signed by former co-CEO Ronald Weinberg and senior executive VP Hasanain Panju.
With the AOL merger coming near, Warner Bros.' Entertaindom.com employees are threatening walkouts and blackouts of the site. Reuters reported that staffers are angry with parent company Time Warner's lack of interest in Entertaindom as the America On-line deal is coming to a close. Hopes of Internet-made millionaires at the fledgling entertainment site were dashed when Time Warner called off the planned spin-off of Entertaindom as a public stock. In addition, the amount of previously agreed-upon Time Warner stock that Entertaindom employees will receive continues to drop.
Nelvana Limited has announced the introduction of Nelvana New Media, a new division that will focus on developing new applications, products and delivery channels for Nelvana's valuable character library. The new branch will create a children's Web entertainment site and interactive games based upon their characters for both CD-Rom and Internet distribution. "Nelvana New Media is an initiative that solidifies the future success of the Company," added Michael Hirsh, Nelvana Limited's co-chief executive officer.
On March 21, 2000, Macromedia, Inc. announced the formation of a venture unit to invest in companies that share Macromedia's vision of Web infrastructure and the interactive, multi-device, broadband Internet of the future. The unit's first investments include Spiderdance, Context Media and iHarvest Corporation. Spiderdance, with branches in San Francisco, Los Angeles and New Jersey, develops a software system that synchs the Web with TV broadcasts.
On Tuesday, March 21, 2000, CINAR Corp. announced that co-founder, Ron Weinberg, and former controller, Mario Ricci, signed documents approving the company's non-board-approved investments. CINAR's spokeswoman, Suzan Ayscough, said, "The documents in question were signed either by Ron Weinberg alone, or by Mr. Weinberg and Mr. Panju or by Mr. Ricci." Previously, CINAR reported that their now fired senior executive VP Panju acted alone in investing the money.
After allegations of fraud, misallocated funds, shareholder lawsuits, executive shuffling, plummeting stock prices and subsidy suspension, CINAR Corp. said Monday, March 20, 2000 that it had filed a law suit against several companies believed to be connected with the US$122 million in unauthorized investments.
In the midst of an on-going legal scandal and the departure of its head execs, CINAR Corp.'s stock plummeted CA$18.65 (US$12.86) to CA$8.35 on the Toronto Stock Exchange Tuesday, March 7, 2000. In addition, the stock fell 12-5/8 to a new 12-month low of 5-3/4 on the Nasdaq. Volume was more than 18 million shares on the Nasdaq, far more than usual for the often thinly traded stock. The stock continued to crumble on Wednesday, March 8, 2000 falling nearly 75% off its initial worth at the beginning of the trading week. In turn, the stock was not traded at all on Thursday, March 9, 2000.
In a meeting with key advertisers, Cartoon Network executives unveiled their business plan for the 2000-2001 television season, including upcoming original series, program acquisitions, which includes the exclusive Looney Toons rights, and comprehensive on-line initiatives. Cartoon Network will produce four original half-hour animated series through 2001, including SHEEP IN THE BIG CITY. This, their ninth original show, will premiere with 13 half-hour episodes in fall 2000.
On Thursday, March 2, 2000, South Carolina's Democratic Senator Ernest
Hollings of the Senate Commerce Committee told Time Warner CEO Gerald Levin
and AOL chairman Steve Case that the "Disney people are afraid to come
testify" about their concerns regarding the proposed merger of the two
companies. Hollings told Levin and Case, who were in Washington D.C.
testifying about their merger, that Disney is concerned that Time Warner
will retaliate against the company by relegating its cable networks to
3Dlabs, Inc., a professional graphics firm, has expanded its presence in
Europe with a new office near Frankfurt, Germany. 3Dlabs plans to use the
new branch as a base for expanding its market coverage in Central Europe,
one of the largest markets for its workstation graphics products. In turn,
3Dlabs announced the appointment of Frank Losch as country manager. Mr.
Losch brings many years of marketing and sales expertise to the new
position. "The ability to increase market penetration of Oxygen workstation
The big kids at Digital Entertainment Network (DEN), a Gen-Y geared on-line
programmer, have received much-needed play money to the sum of US$24
million. The new round of financing includes investments from NBC, Chase
Capital Partners, Enron Broadband Services Inc. and Intel, among others.
Missing from this round of financing is former Warner Bros. chairman, Terry
Semel. However sources say he has separately invested $2 million in the
company. Santa Monica-based DEN has also restructured its management team,
On Wednesday, February 23, 2000, CINAR Corp., the creator of the Emmy
Award-winning ARTHUR, had a lawsuit filed against the company alleging they
artificially inflated its financial results by lying about the use of
Canadian tax credits. As reported [AF 10/19/99], allegations surfaced last
fall that CINAR only pretended to use Canadian authors for its scripts in
order to obtain tax credits. Canadian officials are investigating but no
charges have been filed. The early rumors sent CINAR stock plummeting to
Electronic Arts, one of the world's largest interactive entertainment
software companies, announced the acquisition of multimedia developer
DreamWorks Interactive, LLC. In terms of the deal, DreamWorks Interactive
will become a complete subsidiary of Electronic Arts. Financial terms were
not disclosed. Formed in March 1995 as a joint venture between Microsoft
and DreamWorks SKG, DreamWorks Interactive has produced such PlayStation
titles as LOST WORLD: JURASSIC PARK and MEDAL OF HONOR. Steven Spielberg,
On Tuesday, February 22, 2000, Disney chairman-CEO Michael Eisner made the
announcement: "With Go.com, I believe we are now the sleeping giant of the
Internet. Once streaming video is commonplace," he added, "Disney is ready
with a vast library and the ability to create new content." Added Go.com
chairman Steve Bornstein: "I see a time, in the next few years, or even
sooner, where nobody will talk about television or the Internet separately.
They will become one synergistic, fused media." In scheduled business,
Munich-based EM.TV & Merchandising has acquired the Jim Henson Co. in a
cash and stock transaction valued at US$680 million. The German company now
owns the rights to the Muppets and Sesame Street characters. The purchase
gives EM.TV "some of the most powerful and enduring kids and family brands
worldwide and. . . access to the world's biggest and most important media
market," said Thomas Haffa, EM.TV CEO. "In addition, our investment in
Henson will give us a position in cable networks, which will open up new
Jeff Lotman, CEO of Vivid Animation and Virtual Celebrity Productions,
announced that the company has closed operations. "Vivid, which had just
completed its first commercial project, for MasterCard, will no longer
accept commercial projects," said Lotman who has decided to focus all of
his energies and resources on his two-year-old licensing and merchandising
company Global Icons. "Global Icons is growing faster than I had hoped and
the potential is so great that it demands all of my attention at this
On Tuesday, February 15, 2000, AtomFilms, a leader in next-generation
entertainment, announced that it has locked the first-ever, exclusive,
on-line distribution deal with the USC School of Cinema-Television to
broadcast student films from the illustrious film school's catalog. As part
of the deal, for the next 18 months, USC will provide AtomFilms with
exclusive on-line distribution rights to 100 student titles which includes
shorts from famed alumnus George Lucas and Robert Zemeckis. On February 15,
Rumored since last fall, Walt Disney Animation Canada Inc. announced
Monday, February 14, 2000 it will close the doors of its animation studios
in Canada by the spring. Opened in 1996, the Toronto and Vancouver branches
of Walt Disney were created to produce primarily direct-to-home video films
in connection with Walt Disney Television Animation. The company slowly
started winding down production last fall and will completely close around
After five years in existence, Fox Animation Studios is laying off nearly
70% of its Phoenix-based toon factory's staff. The restructuring of the
animation department will include more contract work outside the studio.
President of animation at Fox, Chris Meledandri said a foundation of 65-100
of the now 320 employees will remain, including, of course, studio staples
Don Bluth and Gary Goldman. Fox will continue to perform pre-production
work including storyboarding, character design, production design and
Mondo Media, a leading creator and distributor of serial-based animated
content, announced Monday, February 14, 2000 that it has secured $20
million in its second round of financing. The newest round was led by
Macromedia and Foundation Capital. Additional funding partners in the round
included Sofinnova Ventures, Red Rock Ventures, Silicon Valley Bank and
Phoenix Growth Capital. Mondo Media also added new syndication partners
that include Excite@Home, AltaVista, AtomFilms and washingtonpost.com.
Expand Images and Ellipse Programme, France's two leading television
production companies, announced on February 10, 2000 plans to merge. The
new studio, entitled Expand, will have an approximate revenue for 2000 of
FRF1.4 billion (US$210.2 million). The deal will enable both parties to
increase their international content output for the expanding European
market. As part of the deal, CANAL+ Images and Finexpand signed an
agreement solidifying their relationship as shareholders in the new studio.
AtomFilms, a pioneer and leader in next-generation entertainment, announced
that it has entered into an agreement with Blockbuster, the global leader
in rentable home entertainment, for selected, syndicated, short-form,
digital content from AtomFilms to be video streamed on a co-branded section
of blockbuster.com. Beginning Spring 2000 and lasting for 2 years,
AtomFilms will provide both content and streaming-related technologies for
the short-form content component of the Blockbuster Web site. The