Earlier this week, Film Roman, Inc. and Chennai, India-based Pentamedia Graphics, Ltd., formerly known as Pentafour Software and Exports, Ltd., have announced a letter of intent pursuant to which Pentamedia will purchase a 51% stake in Film Roman. The deal was a US$15 million cash deal, which is aimed to close by January after regulatory and board approvals. The deal was concluded by Film Roman's president and CEO John Hyde, who joined the company in December 1999, after a tumultuous three year period. Since the company went public in 1996, Film Roman has teetered in the red. Film Roman was suffering from downsizing and a decrease in stock prices. As the producers of "The Simpsons" and "King Of The Hill," Film Roman had learned that producing even the most successful series is profitable mostly to those who own the merchandising and distribution rights. Unfortunately, during Fall 1997, two months after the appointment of David Pritchard as new president and CEO, UPN canceled its order for 13 episodes of "The Blues Brothers," a series for which Film Roman had optioned the rights, part of a plan to produce proprietary programming.
Pritchard was named President and CEO prior to founder and chairman Phil Roman leaving the company and setting up a new studio, Phil Roman Entertainment. In October 1999, Film Roman's Board of Directors ousted David Pritchard, and appointed John Hyde. By replacing David Pritchard, John Hyde stepped into a position with promise and heightened pressure. Besides producing two major television shows, over seeing various live-action film productions and coddling their infant on-line channel Level13.com, Hyde had to deal with the pressures of a position many Film Roman employees didn't want to see vacated by Pritchard after two dedicated years at the head of the company. Hyde has certainly been brought in due to financial concerns. A veteran industry executive, he has overseen films such as "Flight Of The Navigator" and the award-winning "Das Boot," and television shows such as "Mighty Mouse" and "Homicide." However, Hyde's main success may have been as chairman and CEO of MCEG Sterling Inc. where he spearheaded a complex four-way merger between MCEG Sterling, Orion Pictures Corp., Actava Group Inc., and the telecommunications group comprised of Metromedia International and the vice chairman and CEO of Producers Sales Organization.
John Hyde's top priority was to make Film Roman more profitable, essentially by developing proprietary programming. Today's deal with Pentamedia gives concrete expression to his mission. It gives Film Roman the financial means to increase their volume of animation in non-network areas for syndication, hopefully without changing the way they are operating. John Hyde told AWN, "I think it allows us to execute our very specific five-year plan. It allows us to greatly increase the production of animation in non-network areas for syndication, co-productions and co-ventures, where before we couldn't because we didn't have the financing available to us. With a co-production and co-financing partner, now we are in a position we can develop more for those markets." Film Roman will continue to operate as it has in the past with Pentamedia adding two new members to the board. In regards to its current outsourcing relationships, Hyde said, "On shows that we have currently outsourced that won't change at all. 'Simpsons,' 'King Of The Hill,' 'Oblongs' and 'X-Men' will still stay with the sub-contracting companies that we traditionally use. As we go forward in the future obviously we would prefer to do it with our sister company subject both to quality and price considerations." Pentamedia has digital studios throughout India, the Philippines, Singapore, Malaysia and Canada.
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