In the wake of recent layoffs that have halved the staff at The itsy bitsy Entertainment Company (stemming from TibECo financial woes reported by Detroit-based parent company Handleman), the position of company founder, CEO and chief creative officer Kenn Viselman has become a point of contention–and there’s no clear resolution in sight.
At press time, Handleman’s VP of investor relations Greg Mize confirmed Viselman’s resignation, claiming the company ‘is in the process of assessing The itsy bitsy Entertainment Company’s strategic direction and management structure.’ However, Viselman remains adamant that he has made no active decision to leave TibECo. ‘I haven’t resigned in any way or form,’ Viselman responds. ‘I created this company–it’s my dream.’
Viselman’s dream began to unravel in June, when Handleman reversed its typically hands-off ownership position. An agreement signed by both parties allowed Viselman to continue as CEO and chief creative officer, while financial decisions reverted back to Handleman.
Viselman claims he conceded financial control to Handleman under ‘a great deal of pressure so that my partners and staff could get paid, but I haven’t been allowed to control anything.’ And it appears Viselman will throw down the legal gauntlet. Citing constructive dismissal (meaning he wasn’t being allowed to function in his legally assigned capacity), Viselman says he wasn’t consulted about and didn’t agree with many of the layoffs, and has advised Handleman to contact his lawyers.
Handleman currently owns 75% of TibECo, which is positioned within the parentco’s North Coast Entertainment division and is valued largely on the success of the Teletubbies. Viselman owns 22.5% and represents the 25% balance of voting shares. NCE’s operating income for fiscal 2001 was US$4.3 million, compared to US$14.2 million the year before. According to Handleman (a US$1.2-billion company), the decrease can be attributed in part to lower earnings at TibECo.
‘We went into this year knowing we would lose money,’ says Viselman, adopting the you’ve-got-to-spend-money-to-make-money mien. ‘We’re building for 2002 and beyond.’ According to Handleman’s annual report issued on July 24, 2001, TibECo under Viselman had run through US$8.7 million of an US$8.75-million line of credit as of April 28, 2001. By asserting its financial control of the The itsy bitsy Entertainment Company in June, Handleman is now in a position to totally control cash flow.
As far as the future of TibECo is concerned, Viselman forecasts a strong 2002, heralding a Teletubbies comeback, an Eloise TV and theatrical launch, and strong life for NiNi’s Treehouse (a Discovery Kids Channel revamp), Joey and Leonard the Monkey as elements that should revive the company financially next year. Viselman’s own future is a little more hazy, and he admits he’s conflicted. ‘I can’t be any more sure that I haven’t resigned, but I don’t know how I can go back into that environment.’
At press time, Viselman was still waiting on a clear resolution to the situation, and Handleman wouldn’t comment further.