ER To Acquire Classic Media Holdings
Created 12/14/2006 - 00:00
London-based Entertainment Rights Plc. (ER) has conditionally agreed to acquire Classic Media Holdings, Inc. for $210.0 million. Classic Media is the U.S.-based owner of an extensive portfolio of intellectual properties focused on children's and family characters and brands.
The acquisition will create a leading force in the independent global children's and family entertainment market -- combining major childrens and family brands, such as POSTMAN PAT, BASIL BRUSH, RUDOLPH THE RED-NOSED REINDEER, LASSIE, CASPER THE FRIENDLY GHOST, DICK TRACY, GEORGE OF THE JUNGLE, JIM JAM & SUNNY, GERALD MCBOING BOING, LONE RANGER, UNDERDOG, PAT THE BUNNY, FELIX THE CAT, RUPERT BEAR, HE-MAN, SHE-RA, JESS THE CAT, GHOSTBUSTERS and VEGGIE TALES.
A big benefit for ER will be its ability to cross-sell Classic's existing properties and programming into Europe and other key international markets. In turn, Classic offers strong relationships with broadcasters and key retailers in North America will help ER further exploit its extensive library of programming and brands in the U.S. market.
ER will work with Classic's existing portfolio to create new revenue streams, including expanding Classic's licensing, music and new technology opportunities.
The combined library of the enlarged group will consist of approximately 8,700 episodes of programming, characters and brands.
The acquisition of Classic is subject to shareholder approval at an extraordinary general meeting scheduled Jan. 8, 2007, at 10:00 am.
"This acquisition results in the creation of a major global force in children's and family content, characters and brands," Said ER ceo Mike Heap. "It will unite the characters and brands of ER and Classic, creating one of the strongest portfolios of contemporary classic and new children's brands in the world... There are strong cross-selling opportunities and synergies across the two portfolios."
He said the combined library makes a compelling offering for existing and new broadcasters, retailers and licensees.
ER was established in 1989 and admitted to the official list in 1996. The current management team joined the group between 1999 and Oct. 2002 and, since that time, the group has developed rapidly to become the largest specialist supplier of children's and family programming to U.K. broadcasters by distribution turnover (source: Broadcast Distributors Survey, Sept. 2006), with 49 shows currently licensed to both terrestrial and digital channels in the U.K.
In order to capitalize upon the growing market place in children's and family intellectual property rights exploitation, ER has evolved a strategy focused upon both the ownership of characters and brands, and the representation of third party characters and brands, creating a large and diverse portfolio of intellectual property rights. It owns or controls distribution and exploitation rights to a broad ranging catalogue of childrens and family programming, including BASIL BRUSH, POSTMAN PAT, RUPERT BEAR, JIM JAM & SUNNY, HE-MAN, SHE-RA, TRANSFORMERS, DUEL MASTERS, BARBIE, THE ARCHIES and FAT ALBERT.
The Classic Group, founded in 2000, is a US-based owner and distributor of a collection of children's and family programming and related character-based intellectual properties rights. Classic exploits its rights through a range of sales channels, including home video sales, TV licensing and merchandising.. Classic has offices in New York City, Nashville and Los Angeles, plus employs a staff of 80.
Classic has an extensive library of approximately 3,500 episodes of animation programming across in excess of 210 program titles, including well known brands, such as CASPER THE FRIENDLY GHOST, MR. MAGOO, RICHIE RICH, RUDOLPH THE RED-NOSED REINDEER, THE LONE RANGER, LASSIE, UNDERDOG, LITTLE LULU, PAT THE BUNNY, LAMB CHOP, ROCKY & BULLWINKLE, DICK TRACY, GERALD MCBOING BOING, ROGER RAMJET and GEORGE OF THE JUNGLE.
In Dec. 2003, Classic entered the faith-based children's entertainment market when it acquired certain assets of Big Idea Prods. Inc., a producer and creator of values-based family entertainment programming. Amongst the assets purchased were the intellectual property and distribution rights to LARRY BOY, 3-2-1- PENGUINS! and the award-winning VEGGIETALES series of programming which, to date, has more than 45 million home entertainment units in the U.S.
In August 2006, Classic entered into an operating agreement with ION Media Networks Inc. NBC Universal Inc. Scholastic Ent. Inc. and a subsidiary of Corus Ent. Inc. to form Children's Network Venture Llc. for the purposes of developing, managing and owning a branded children's multi-platform programming service distributed broadly and free to the American public. Classic's initial investment was $2.4 million. As a result of this agreement, the branded block entitled, "Qubo" launched in the U.S. on Sept. 9, 2006, on NBC and Telemundo and is broadcast in English and Spanish with access to approximately 80 million households in the U.S. Future Qubo multi-platform offerings will include a dedicated 24/7 digital television kids network that will launch across ION Media Networks' nationwide television station group, a branded website and video-on-demand services.
Classic actively exploits the motion picture rights of a number of its brands, including LASSIE (released in the U.K. in 2005 and in the U.S. in 2006), UNDERDOG (due for release by Spyglass/Disney in 2007) and VEGGIETALES (due for release by Universal in 2008), and its rights across licensing and merchandising videogames and e-commerce.