It was a close call for one of the Prairies’ most successful and longest-standing production companies, but Regina-based Minds Eye Entertainment has emerged from credit protection with a restructured business plan and a sobered outlook on Canadian production.

Facing insolvency only five months ago, Minds Eye filed for court protection under the Companies’ Creditors Arrangement Act on July 28. CCAA protection essentially buys a company time to develop and implement a new business plan, restructure debt and convince creditors it is a viable company with a feasible plan in place to repay debt owing.

The Court of Queens Bench, Saskatchewan, officially lifted Minds Eye’s credit protection status Jan. 9, after 115 creditors voted unanimously in favor of giving the company a chance to turn things around with a restructured business plan in place.

The key to restructuring Minds Eye is lowering overhead and focusing the company on its core activities, distribution, production and interactive properties. Under the new business plan, distribution will account for 70% of the company’s business, production 20% and interactive properties 10%.

Although CEO Kevin DeWalt says he doesn’t see a day when Minds Eye will be out of production entirely, he is reducing the production slate by more than half and says production volumes will not return to the $60-million high of 2002. The production budget for 2004 will be in the $25-million range and will stay there for at least two years, after which it may grow to somewhere between $30 million and $35 million.

‘We don’t really see the future of the industry in production. With the cost of production and the lack of financing now available in the Canadian system, it is very difficult to make money as a corporation in production,’ says DeWalt. ‘Quite frankly, it is barely a break-even business.’

Once heavily into post-production, Minds Eye has sold off its audio and video post facilities, which account for 40 employees and considerable overhead. PostMaster Digital, with offices in Calgary and Regina, was shut down and its assets sold off in December. In a deal to be finalized Jan. 31, control of Regina-based Talking Dog Post & Sound Studios will return to original owner Rob Bryanton, maintaining 15 staff positions.

In addition, Minds Eye sold its Manitoba production arm, Buffalo Gal Pictures of Winnipeg, back to original owner Phyllis Laing. Minds Eye’s Alberta production office has been closed and its development office moved from Edmonton to the head office in Regina – significant changes considering that only two years earlier DeWalt was looking to expand.

In 2001/02, business was booming. The company raised $10 million in investment to facilitate its growth, gross production volumes exceeded $60 million, and 80 fulltime employees worked at offices in all three Prairie provinces. Now the pared-down company has 18 fulltime employees, a single Saskatchewan office and production volumes have been cut in half.

DeWalt identifies international market downturns as the primary stumbling block, with a rising Canadian dollar and cutbacks in domestic financing further compromising the company’s position.

‘We should have reacted much sooner to an anticipated downturn, but when you have employees and you’re responsible for families, you sometimes don’t react quick enough,’ says DeWalt. ‘In hindsight, we should have downsized much sooner.’

Minds Eye will focus on five projects in the near future: Creepshow, a 26 x 30 animated series for YTV; The Sale/Pelletier Story, an MOW on the Canadian figure skaters for CTV; Crude, a 22 x 60 primetime drama series for A-Channel and Movie Central; The Tommy Douglas Story, a 2 x 60 miniseries for CBC; and Damon, a 22 x 60 primetime adventure series for Space: The Imagination Station, CHUM and Citytv.

-www.mindseyepictures.com