Internal tensions have risen at embattled German media firm EM.TV & Merchandising over whether or not to accept German mega-firm Kirch Group's proposed bail out. CEO Thomas Haffa, whose family owns 50% of EM.TV shares, has been reported to favor the Kirch deal. Rumors have suggested that he even asked supervisory board chairman, Nickolaus Becker, to step down from his post. Becker along with other members of the board favor a deal with U.S.

On Friday, February 2, 2001, scandal plagued Cinar Corp. released their long-awaited reworked financial statements for the past four years. For the year ended November 30, 1998, the company lowered net earnings from CA$21.8 million (US$14.6 million) to $15.7 million ($10.5 million) and for the year ended November 30, 1997, $12.9 million ($8.6 million) to $6.6 million ($4.4 million). Retained earnings for the year ended November 30, 1996 were reduced from $22.4 million ($15 million) to $16.3 million ($10.9 million).

Internet entertainment destination iFilm has secured US$10 million more in financing. The new funds will keep the Website in operation well into the next year. New investors in the dotcom were Yahoo! and cable executives Marc Nathanson and Leo Hindery. Axiom Ventures, Eastman Kodak Co., Sony Pictures Entertainment and Vulcan Ventures were the returning investors. Officials at both iFilm and Yahoo! declined to give specifics about how the investment will change the two Net firms' relationship. However, negotiations are in full swing to have iFilm utilize Yahoo!

DreamWorks is backing out of GameWorks, a string of location-based entertainment centers, which it helped found five years ago. DreamWorks' spokeswoman Vivian Mayer said, "Our commitment was a creative input. We fulfilled our commitment." Steven Spielberg was one of the original initiators of the company and oversaw the design of many of the coin-operated arcade versions of his films, like JURASSIC PARK. GameWorks has reported that same store sales are up an average of 10% in the past six months and overall revenue is up US$10 million from last year.

Dark Horse Entertainment and Slovenia-based Strip Art Features (SAF) have teamed up to create a new company, Venture, which will publish graphic novels and comic books with the intent to launch them onto film and television. The first graphic novel to be produced by the firm will be BLOOD TIES by Belgian artist Hermann and writer Yves H. The story is described as a Faustian tale that journeys into a rotten big city with a junior detective from the suburbs named Sam Leighton.

Sega Corp. has announced that it will cease production of its next-generation gaming console Dreamcast and will focus on game creation for Sony's PlayStation 2, Microsoft's Xbox and Nintendo's Game Boy Advance and GameCube. "It's becoming harder and harder to be profitable with a hardware platform. It's the games that matter," said Peter Moore, president of Sega's U.S. operations. Very low holiday sales are attributed to this decision. As a result, the company will cut prices on the remaining consoles from US$149 to $99.95 beginning Sunday, February 4, 2001.

Plagued TV producer Cinar has filed a CA$28.6 million (US$19 million) civil suit against company founders Ronald Weinberg and Micheline Charest and former senior executive VP and CFO Hasanain Panju.

New reports have the Walt Disney Co. throwing its name into the hat to help bail out German producer EM.TV & Merchandising by purchasing its Jim Henson Co. EM.TV acquired the Muppet makers last February in a cash and stock transaction valued at US$680 million. However, rumors have voiced former president and CEO Brian Henson's disapproval over the deal due to the devaluation of the company's stock. In the past, when the Jim Henson Co. was privately held, Disney and the Muppet masters had signed a licensing deal with each other that brought Henson-owned characters to Disney theme parks.

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Warner Bros. has folded its TV Animation, Feature Animation and Classic Animation under the single Warner Bros. Animation roof. Rumors have been flying of late about massive lays off and the closing of the Classics division, however a Warner Bros. spokeswoman has told AWN that under ten employees were let go as a result of the restructuring. Warner Bros. Animation is transforming into a running production business model, instead of its overhead model of the past. The new plan will create more accountability and efficiency throughout the division.