Harvey Entertainment Company announced that The Chase Manhattan Bank is arranging a US$25 million, five-year revolving credit facility and that Harvey has completed the acquisition of 100% of the capital stock of PM Entertainment Group Inc., an independent entertainment production and distribution company. The PM Entertainment Group purchase consisted of $6.5 million in cash and $1.45 million in Harvey Entertainment Common Stock paid at closing, as well as a $2.05 million subordinated note, payable over the next five quarterly periods.
Humongous Entertainment, a leading publisher of children's entertainment products, announced a donation of US$228,000 to the Make-A-Wish Foundation, the largest wish-granting organization in the world. The donation was the result of a specially created holiday promotion appearing on 16 of Humongous Entertainment's popular children's CD-Roms. With more than 105,000 holiday consumers participating, this promotion became the largest rebate program in the company's history.
The Royal Canadian Mounted Police (RCMP) filed their first documents in the CINAR Corp. tax fraud case. According to the report CINAR received at least CA$7.8 million (US$5.4 million) in Quebec provincial tax credits by allegedly placing false Canadian names on scripts written by U.S. writers to receive tax credits. In the report, RCMP says that several executives, including former co-CEO and co-founder Ronald Weinberg, asked former CINAR employee Thomas Lapierre to create subcontracts that would be used to pay U.S. scribes.
GT Interactive Software Corp. announced that in an effort to boost its Humongous Entertainment children's software division, it would fold the company's existing operations into the GT Interactive arm. The New York-based gaming company will adopt a unified corporate direction, similar to that of GT Interactive's majority owner Infogrames Entertainment. Infogrames hopes that the new arrangement will increase shareholder value and produce a re-energized company.
Time Warner Inc. reported operating income before amortization of intangible assets (EBITA) of US$1.17 billion on revenues of $6.55 billion for the first quarter of 2000. In the first quarter of 1999, EBITA was $1.24 billion on revenues of $6.09 billion. EBITA grew 13% for the first quarter when normalized for certain items described below affecting the comparability of operating results. Revenue grew 8% for the quarter on a normalized basis.
On Wednesday, April 12, 2000, Nelvana Limited announced it has acquired privately held Klutz, one of the leading branded children's book publishers in the U.S., for US$74 million. The Toronto-based company plans to integrate Klutz into Nelvana's Branded Consumer Products business, which includes established operations in publishing and merchandise licensing. Under the terms of the agreement, Nelvana will acquire 100% of the stock of Klutz.
An event has happened that comic book fans have been debating over late night games of Dungeons and Dragons for decades -- What would Batman be like if Stan Lee created him? DC Comics announced the teaming of living legend Stan Lee, the co-creator of Spider-man, the Hulk and the X-Men and founder of Stan Lee Media, with longstanding rival DC Comics to present Lee's alternative interpretation of such super-heroes as Batman and Superman.
Stan Lee Media, Inc. (SLM) announced a strategic alliance with Canadian-based Toon Boom Technologies for the development of Web-based animation software, which SLM will utilize in constructing its episodic Web comics. Jamie Wilkinson, executive vice president, Internet strategy for SLM, will oversee Beta testing in late summer/early fall 2000, to take place in Montreal and at a number of animation houses throughout the world. Pentafour Software & Exports Ltd., a leading developer of 2D/3D graphics and animation, special effects and software, will also participate in the project.
PuppetTime, Inc. and Prosoft Engineering, Inc. announced a strategic development partnership that will provide PuppetTime with access to Prosoft's engineering resources to accelerate the development of PuppetTime's patent pending Web 3D storytelling technologies.
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.
Film Roman Inc. and The Harvey Entertainment Company announced an agreement whereby The Harvey Entertainment Company will serve as Film Roman's international sales representative. As part of the deal, Harvey will handle sales and distribution of the Film Roman library beginning at MIP and will manage all servicing and collections for Film Roman. Jon Vein, Executive Vice President of Film Roman said, "Our companies both share the belief that independents need to combine their sales and distribution efforts in order to successfully compete internationally.
3Dlabs, Inc. Ltd., a high-end 3D graphics tool creator, announced that it has acquired the assets of the Intense3D operations of Intergraph Corporation. The stock transaction is expected to add to earnings on a goodwill (EBG) basis from the third quarter of 2000 onwards. Under the terms of the agreement, 3Dlabs will issue up to US$3.69 million common shares of 3Dlabs to Intergraph as initial consideration for the acquired assets and goodwill, with an earn-out provision totaling up to an additional $25 million, payable in stock and/or cash.
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.
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.
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 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,