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 venture’s debt. Long in the rumor mill, this new acquisition is supposed to be final and announced within a few days according to Ms. Hofmeister’s 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."

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.

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.