There’s gold in them there books-at least DIC Entertainment believes there is. With the L.A.-based animation house’s recent purchase of troubled U.S. kids pubco Golden Books, DIC chairman and CEO Andy Heyward is confident his company has uncovered a hidden treasure that’s just waiting to shine.
‘Golden Books has great classic properties, which offer a tremendous growth opportunity that we believe we can exploit,’ says Heyward. DIC paid US$170 million for the publisher-a relative steal, considering that as recently as three years ago (the last time Golden Books was on the block), analysts valued the company at US$350 million.
In recent years, though, the pubco that gave the world Saggy Baggy Elephant and The Poky Little Puppy had suffered from poor management decisions, a lack of funding and, more recently, the loss of a major licensing deal with Disney, which crippled its ability to develop properties beyond books into other sectors. That’s all about to change, though, with DIC at the helm, says Heyward.
‘To date, Golden Books has essentially been a publishing company. We believe that when we take their characters and put them into entertainment venues, it will provide them with a tremendous amount of exposure, which will translate into merchandising opportunities,’ he says. With TV in the mix, Heyward believes that DIC will also be able to raise the profile of Golden Books’ properties outside of the U.S., where they are virtually unknown.
Initially, DIC will focus on GB’s preschool properties, starting with Pat the Bunny. Prior to the acquisition, DIC, which has produced cartoons such as Madeline, Inspector Gadget and Sonic the Hedgehog, signed a licensing deal with Golden Books to develop a show based on the cute rabbit property. Tentative plans have delivery to a broadcaster slated for fall 2002.
In other news, DIC has signed an exclusive distribution deal with Lions Gate Home Entertainment (a division of Lions Gate Studios) to distribute its library of programming in North America. For DIC, the multiyear deal represents its first step back into the home entertainment realm since Heyward, newly named DIC president Brad Brooks and investment company Bain Capital bought the company back from Disney in November.
Though DIC had planned to start releasing its shows on video and DVD in the spring, the process of choosing a distribution partner took longer than expected, says Don Gold, executive VP of home entertainment. Ultimately, though, selecting Lions Gate became a no-brainer. ‘Lions Gate was the most enthusiastic about our shows, and put together a plan that would allow DIC to be the focal point for all of its children’s programming,’ says Gold.
As per the agreement, Lions Gate will release DIC’s catalog, which includes some 2,500 half hours of programming, on VHS and DVD through its Trimark Home Entertainment division. Starting in August, Trimark will bow with best-of episodic collections for Sabrina: The Animated Series and the Ivan Reitman-produced Mummies Alive! on VHS and DVD, and will follow up with releases for Madeline in September. Gold says the two companies will work closely to aggressively market DIC’s titles, and the partners plan to tie in promotionally with The Learning Company for video releases of Where in the World is Carmen Sandiego? and with Sega for Sonic the Hedgehog, which celebrates its 10th anniversary this year.
Though DIC’s agreement with Lions Gate covers North America only, Gold says the company has begun negotiating separate deals with a number of distributors outside the U.S. to distribute DIC’s shows on DVD/VHS internationally.