AAC sheds post facilities

As part of its efforts to pare back and focus on its core businesses, Alliance Atlantis Communications has sold three of its post-production subsidiaries to Hollywood-based Point.360.

The video and film asset management service has purchased a six-month option to acquire AAC-owned sound and picture post houses Tattersall Casablanca Sound and Salter Street Digital and animation house Calibre Digital Pictures.

‘We are confident that this arrangement with Point.360 will help us achieve our three objectives of focusing on our core businesses, finding a new home for our award-winning post-production companies and ensuring continued access to top-quality post-production services, states Paul Labarge, SVP corporate development, AAC.

Under the terms of the deal, AAC will give Point.360 a right of first refusal on its currently outsourced post-production and duplication work for the duration of the option.

In a quarterly conference call June 25 to analysts, AAC chairman and CEO Michael MacMillan indicated more such moves are likely as the company focuses on its motion picture distribution, entertainment and broadcast groups. The latter continues to be the cornerstone of AAC’s long-term investment and growth plan.

AAC has laid off close to 130 employees since the new year.

According to a statement, Point.360 does not expect any layoffs as a result of the transaction.

LGE year-end

In writing off portions of its money-losing investments in Mandalay Pictures and CinemaNow, Lions Gate Entertainment posted a loss of $73.6 million ($1.86 per share) for fiscal 2002 (ended March 31) despite growth in all of its core businesses.

Before the write-downs, which totaled $52.5 million, LGE’s net loss was $21.1 million in 2002, caused in part by increased marketing costs compared to earnings of $18.6 million in 2001.

LGE plans to sell its 45% equity investment in Mandalay.

‘In fiscal 2002, we completed the majority of our investment and restructuring initiatives and significantly expanded our film and television production, building on the strengths of our core operations,’ says LGE CEO Jon Feltheimer. ‘We also took the necessary write-downs that will enhance the visibility of our results and better highlight our core business strengths in the future. As a result, we expect to report free cash flow and profitability in fiscal 2003 as we benefit from product already in the pipeline and a continued disciplined approach to production and distribution.’

LGE saw overall revenue jump 45% to $426.6 million in 2002 from $282.2 million in 2001.

Motion picture revenue jumped 39% to $251.3 million, led by the theatrical performances of the Oscar-winning Monster’s Ball, Spanish-language film Amores Perros, the theatrical and home-video releases of O and The Wash and the home-video release of Shadow of the Vampire.

Television revenue increased 49% to $110.7 million, due primarily to increased programming delivered in all Lions Gate Television genres.

Lions Gate’s animation partner CineGroupe generated $55.6 million, an 87% increase over the year, led by the PBS children’s hit Sagwa: The Chinese Siamese Cat and What’s With Andy.

Lions Gate Studios revenue increased 20% to $5.5 million.

Credo debt tops $3M

Winnipeg’s Credo Entertainment, which went into receivership June 12 after 28 years on the Manitoba production scene, owes in excess of $3 million to various creditors, including more than $1 million to both the Royal Bank and CIBC.

The company’s assets, which will be sold to compensate creditors, include property, equipment and a library including titles such as World’s Greatest Spas and The Adventures of Shirley Holmes.

Earlier this year, Hockey Dreams, a Credo MOW for CBC, received LFP and EIP funding, and although CBC still hopes the project can be resurrected, its fate remains uncertain.

In 1998, Credo grossed $33 million, but two years later the company began contracting, losing a number of key producers, including Jamie Brown (Frantic Films), Kim Todd (Original Pictures) and Andrew Koster (Rainshadow Media).

In 2001, Credo signed on to produce Fall From the Sky, a $7.2-million drama for CBS, but plans for the MOW based on a plane crash were cancelled soon after 9/11. Although Credo’s president Derek Mazur would not comment, it’s likely this cancellation was a key factor in the production company’s downfall.

Original Canadian tops at Teletoon

Top-rated specialty channel Teletoon reports nine of its top-10-performing series are original Canadian series, according to 2+ data from Nielsen Media Research. The top-rated shows are: Braceface (Nelvana), Caillou (Cinar), For Better or For Worse (Funbag), Pig City (CineGroupe), RoboRoach (Portfolio Entertainment), The Untalkative Bunny (Dynomight), What About Mimi? (Studio B) and What’s With Andy? (CineGroupe).

In a year-to-date review, Carole Bonneau, VP programming, says six Canadian titles are among the network’s top-10-rated series with 2+ audiences; eight Canadian titles are among the top-10-rated series in the 2-11 demographic; and eight Canadian titles are among the network’s top-10-rated series with the 12-17 crowd.

Teletoon is obliged by licence to invest $65 million in original Canadian productions and acquisitions over its seven-year licence. However, according to Bonneau, the network is currently forecasting investments of close to $90 million in Canadian animation over the period, including more than $42 million for the development and production of new Canadian animated series.

Playback recently reported that in 2001 more than $276 million was spent solely on animation in Canada by 19 independent production houses. And, according to the 2001 BC Animation Industry Study, total revenues for the B.C. animation industry were estimated at more than $462 million, with revenues expected to increase by 45% by 2003.

Digi market on the rise

The number of digital TV subscribers in Canada rose 6% to nearly three million in the first few months of 2002, says a new report from Decima Publishing.

According to the report, the Canadian broadcast distribution industry is firmly transitioning from analog to digital with the emergence of intensely competitive marketing strategies.

Satellite providers Bell ExpressVu and Star Choice continue to dominate with a combined 63% of market share, compared to cable’s 35%. Decima expects these percentages to balance out at 60% and 38%, respectively, by the end of 2002.

The digital TV market data is contained in Decima’s report The Digital Domain: Tracking the Growth and Development of the Canadian Digital TV Market, the fourth in a quarterly series.

WFF hosts Conferences 2002

Jim Griffiths, president, MGM Worldwide Television Distribution, is the featured keynote speaker at Conferences 2002, Aug. 26-28, organized in association with the Montreal World Film Festival and the International Film Market.

The conference program is intended to facilitate networking, with panel sessions on international distribution and financing trends, production, broadcasting, media convergence and Hollywood North.

A panel session on financing will look at trends and challenges from Canada to Germany, Hong Kong, Latin America and Italy, says conference organizer Michel Zgarka.

This year’s IFM program includes a Coproduction Exchange and a technical and locations services exposition called Location Expo – Hollywood North, running Aug. 26-30, as well as a parallel exhibition on new technologies called MINT 2002.

All events take place at WFF headquarters at the downtown Wyndham Hotel. WFF and IFM run from Aug. 22 to Sept. 2.