In this report we take a look at the activities and game plans of Canada’s public production companies.

In this report:

Alliance p. 40

Atlantis p. 42

Cinar p. 39

Coscient p. 40

Devine p. 42

Greenlight p. 43

Keystone p. 43

Malofilm p. 37

Nelvana p. 38

Paragon p. 40

Most recent in what has been a significant year for Atlantis Communications is news that the Toronto-based production and distribution company with a majority interest in Life Network and a minority interest in ytv has sold its 28% of the youth network for $27 million. Shaw Communications is the buyer and the sale is subject to crtc approval.

President/chair/ceo Michael MacMillan says the sale was prompted by recent changes in the shareholder split, which put Shaw in a majority position. Rather than be a minority shareholder, MacMillan says Atlantis decided to put its efforts into businesses it controls, almost doubling its original investment in the process.

MacMillan emphasizes ‘we’re still committed to specialty broadcasting,’ and says Atlantis’ existing specialty service is profitable. Life is on target or ahead for its ad revenue targets and in signing up cable operators – it’s in 60% of homes and growing. Atlantis has two new specialty channel applications before the crtc: hgtv, a house and garden service, and SFTV Canada, a sci-fi channel (with Allarcom).

The company’s audio post interest, Casablanca Sound, is also performing well.

MacMillan projects modest growth in Atlantis’ three key areas of activity, production, distribution and specialty broadcasting, saying that the focus in ’96 will be on the bottom line, ‘making sure that we’re producing profitably.’

‘We’ve had huge top-line growth, now it’s time to digest that and extract the bottom line.’

Responding to inappropriate growth, Atlantis went through a substantial downsizing in the summer and autumn of 1995, reducing staff costs by 20%. In other organizational changes last year, coo Kevin Shea left to join CanWest Global, and MacMillan took over Shea’s duties, resuming responsibilities he had held until Shea’s arrival in early 1994.

The last reporting period, third quarter ending September ’95, took the hit for restructuring costs. A net loss of $4 million was posted on revenues of $29.7 million (a 123% increase over ’94 revenues for the period). MacMillan comments that despite the unsatisfactory results, ’95 was a positive year in terms of the company’s consolidation strategy.

Last spring, Atlantis arranged for credit financing of $50 million with the Royal Bank of Canada, bringing the company’s credit facilities to more than $80 million. The extra cash is allowing the company to interim finance many of its productions.

In production news, Atlantis made a concerted push into the syndication market, beyond its series The Outer Limits and TekWar. The company launched three titles at the 1996 natpe, Sinbad, PSI Factor and Otaku Patrol Group, of which the first two were successfully cleared by their American syndicators.

At home, Traders for CanWest Global was launched Feb. 1 with with good ratings and an order from the broadcaster for 13 episodes for season two. Prior to Traders’ launch at mip-tv, sales are being nailed down in more than half a dozen countries.

In other production news, Destiny Ridge was canceled by CanWest Global after two seasons; My Life as a Dog, made with Credo Group for TMN-The Movie Network and Superchannel in Canada and Showtime in the u.s., has just finished production on season one; and the kids’ series Flash Forward has been presold to Disney Channel in the u.s., a first for Atlantis.

Atlantis also made a number of mows last year including Trial at Fortitude Bay for cbc, which sold to Lifetime in the u.s., Married Life for tmn in Canada and Comedy Central in the u.s., and Night of the Twisters for Family Channel in the u.s.

The company has a hefty slate in development, including Cold Squad, a female cop drama pilot for Lifetime in the u.s., and Borrowed Hearts, a feature-length project written by Earl and Pamela Wallace, the husband and wife team who penned the feature film Witness.

Last year, Atlantis launched into development on Tamara, its first new media production. The interactive drama has a budget of us$2 million and is expected to be ready within the next two years.

There are over 9.5 million shares outstanding, of which 45% are owned by Atcan (MacMillan and other company principals Seaton McLean, Ted Riley and Peter Sussman) controlling 88% of the vote. Trading at the $7 3/4 mark, the market cap is about $75 million. Although MacMillan claims no merger/acquisition intentions, he is ‘looking forward to new foreign ownership rules.’

Atlantis is listed on the Toronto Stock Exchange.

With files from Mary Maddever.