buys Cannell

Vancouver: Cannell Films has a new owner with very deep pockets, which could spell more television production in Vancouver.

New World Communications Group, a publicly held, vertically integrated tv entertainment company based in l.a., signed an agreement to acquire u.s.-based Cannell Entertainment (which includes Stephen J. Cannell Productions, l.a. and Cannell Films in Vancouver), for u.s.$30 million in convertible securities. New World’s major shareholder is u.s. billionaire Ronald Perelman.

Penelope Levey, a Cannell spokesperson, says the deal was struck because Cannell had been looking for an opportunity to expand the company and take it to the next level and New World seemed to accomplish that.

New World subsidiaries own and operate broadcast stations, develop and produce syndicated and network programming and distribute and syndicate programming domestically and internationally.

Rumor has it Vancouver is being considered as the production base for New World’s beefed-up production plans.

The deal does not include North Shore Studios in Vancouver, which remains jointly owned by Paul Bronfman’s Comweb Group, Stephen J. Cannell and Michael Dubelko, president of The Cannell Studios in l.a.

Although the takeover has been rumored around town for several months, many Cannell Films employees are still anxiously awaiting word on their fate while due diligence is carried out on the deal, which is expected to be finalized by June 15.

The acquisition provides Cannell with a long-term distribution pact with New World for all of Cannell’s tv shows. Cannell’s syndication operations will now be handled by New World-owned Genesis Entertainment.

In one sweep of the pen the deal will also turn New World Entertainment, run by chairman Brandon Tartikoff, into a major force in primetime dramatic tv and will help to beef up its casting, production and post-production operations which had lain fallow for several years as the company focused its activities on international distribution.

Cannell put his 16-year-old company up for sale almost a year ago after selling off most of his u.s. tv station holdings.

Bronfman says the purchase should not affect operations at North Shore as the ownership remains the same. However, he concedes New World is independent of the studio and there is no obligation for it to shoot there. ‘We don’t anticipate any problems though, they (New World executives) liked Vancouver and liked what they saw when they toured our operation.

‘From my standpoint, we have a long relationship (with Stephen J. Cannell) and I’m glad nothing is changing for the studio.’

‘It’s a good strategic alliance,’ says Peter Leitch, acting general manager of North Shore. ‘This will not change the nature of production at Cannell Films in Vancouver, only the amount of production, which stands a good chance of increasing.

‘New World has far deeper pockets, and these days with the increasing cost of financing productions, that’s what you need to stay alive in the business.’

Leitch says what attracted New World to Cannell’s Vancouver operation is its production capabilities and some of its assets. Most of Cannell Films management and staff will likely be retained, he adds.

Bronfman says Cannell’s decision to sell the production company was motivated by the rapidly changing global market. ‘The market for independent producers and distributors is getting tougher and tougher, especially with the networks having their own production arms to sell to the networks. It’s essential to have access to those markets to sell the programming,’ he says.

Says Don Ramsden, president IATSE Local 891, which has a long-term collective agreement with Cannell Films: ‘It’s hard to know what the merger will mean until they (New World) start coming here, but if this move makes it so more product can be made here then it’s a great news. We know that Cannell has been a good employer who has provided a lot of work for our members over the last seven years. We sure hope that doesn’t change.

‘What’s interesting to us in the sale is that we will finally learn what assets Cannell has up here. Being a private company, we have never known that before. When you are doing collective bargaining it always pays to know the financial situation of the party you are dealing with.’

New World has not shot in Vancouver since 1990 when Lorin Salob, a senior vp of production, tried to bring the tv movie I’ll Take Romance to the city, shooting with a fledgling acfc crew. He encountered such stiff opposition to acfc from rival unions iatse and Teamsters that he moved the show to Seattle.

Ramsden says this time New World will be welcomed with a new attitude.

At press time, no one from Cannell in l.a. or New World could be reached for comment.