A new tree appeared on the landscape this month, with word that Lions Gate has sold off its Canadian distribution operations to newly formed Maple Pictures, a Toronto-based outfit that, overnight, has taken its place as the second-largest indie film and video handler in the country, behind Alliance Atlantis.

The move leaves Lions Gate with few holdings in Canada. The border-straddling company has a 10% stake in Maple and its studio lots in B.C.

Maple Pictures is steered by former LG execs Brad Pelman and Laurie May, and now carries all LG titles in Canada. A library deal covers some 8,000 movie, TV and home video titles such as Fahrenheit 9/11 and Open Water, while a first-look output deal applies to all new LG productions.

‘We’re a new company but we’re also an established company,’ says May. Financial details of the deal have not been released, except that Pelman and May are ‘significant’ shareholders in Maple, along with two unnamed equity partners.

Maple is also set to grab the 650 titles owned by Artisan Entertainment when that company’s deal with Alliance Atlantis expires in 2007. Lions Gate bought Artisan in 2003. Maple will also be ‘at the table’ when output deals at other distribs come up for renewal, says May.

For instance, AA’s arrangement with Focus Features and New Line Cinemas expires at the end of this year. Its Miramax deal will run out in 2006. Federal law prohibits foreign-owned companies from distributing films in Canada, the exception being the Hollywood studios that had offices in Canada before the law was passed.

Maple is looking to handle about 80 new video titles and 15 to 18 theatrical releases per year, starting with Crash – a Hollywood ensemble piece with Sandra Bullock and Matt Damon, set for May 6. The French thriller High Tension and the horror pic The Devil’s Rejects will follow shortly.

AAC’s distribution wing handled roughly 80 movies, 169 video titles and 190 DVDs last year. Its library includes 4,500 titles.

‘Home video and DVD is the bread and butter,’ notes Pelman, ‘but that doesn’t detract from the market spend and scientific approach we bring to our theatrical releases.’

Its deal with Lions Gate swings both ways – LG has first-look rights for the U.S. and international rights to any titles picked up by Maple.

‘I think we have a very interesting chance to jump in and refocus the Canadian marketplace, to rebuild Canada on the world stage,’ says Pelman. ‘We’ll look at every film on a case-by-case basis. Whether it’s a Lions Gate acquisition or production or a third-party product we picked up.’

Lions Gate is a minority partner in the new company and its president, Steve Beeks, will sit on its board of directors. Maple has also bought a majority of Lions Gate’s interest in Christal Distribution, and other LG distrib and production assets in Canada.

Pelman joined Lions Gate in 1997 and co-managed its Toronto office while doubling as EVP of sales and distribution. May also joined in ’97 and was a central figure in several deals as SVP of legal and business affairs.

Financing for the deal came from the RBC Royal Bank Media & Entertainment Group.