Montreal: Telescene Film Group and Corporation CineGroupe have announced an agreement to form a joint-venture development, production and distribution company for live-action programming. The still-to-be-named company will be based in Montreal with offices in Los Angeles, with 80% of the ownership held by CineGroupe, 20% by Telescene.

The agreement requires corporate authorizations, approval from regulatory bodies and Telescene’s secured creditors. CineGroupe has agreed to finance the new production company for a period of at least two years. For accounting purposes, the new company becomes a CineGroupe subsidiary.

With the deal, Telescene continues to exist but only in the form of its estimated 450 half-hour library and an unspecified amount of account receivables. The new company will distribute and exploit the tfg library, and has a right of first refusal to buy the library outright. CineGroupe will also manage other Telescene assets, including its receivables and refundable tax credits. Subject to certain exceptions, CineGroupe-controlled projects in development will be transferred to the joint venture.

Telescene will cease all production once the 22-hour action-adventure coproduction Sir Arthur Conan Doyle’s Lost World wraps in Australia. Episode 22 was shooting at Playback press time, with post expected to wrap within three months.

The joint venture’s initial production, slated for as early as March, will be the third season (21 half-hours) of Big Wolf on Campus, bringing total production to the 65-episode syndication mark. Talk out of last month’s natpe in Las Vegas indicates Saban International may be involved in the financing of the new round. The sitcom currently airs on Fox Family in the u.s. and ytv in Canada, as well as on vrak-tv in the French Quebec market.

Telescene’s status under court-ordered bankruptcy protection does not change, and the company must obtain the consent of its secured creditors, ‘a hurdle to be crossed,’ says Errol Glasser, a director with the company.

Glasser says the deal with CineGroupe ‘provides a mechanism so that we can continue exploiting all the development work that has been done. That’s a positive and it doesn’t cost the company anything. All the costs will be borne by the joint venture and CineGroupe.’

The only personnel confirmed with the new company at this point are Robin Spry, Telescene president and ceo, and Marie-Claude Beauchamp, CineGroupe exec vp, development and production financing. Other appointments are being negotiated and will mainly depend on the extent of the production slate.

Clearly, CineGroupe will not buy into any significant overhead. Daniel Proulx, Telescene’s cfo, will not join the new company. Nor will Glasser, who remains a director of Telescene.

CineGroupe is headed by president and ceo Jacques Pettigrew. Partners and shareholders include Vancouver-based Lions Gate Entertainment and Fox Family Worldwide. Germany’s Tele-Munchen also holds an equity interest in CineGroupe. •

-www.cinegroupe.com