Cool international market puts Fireworks on the block
Blaming a lackluster performance of North American content on the international market, Canadian media conglomerate CanWest Global has announced that it will be offloading production and distribution arm Fireworks Entertainment and selling off its catalogue. The division will no longer produce or acquire new programming, but will continue its distribution activities until a buyer for the library is found.
CanWest will keep supporting production on shows for the Canadian market, including tween mystery series Strange Days at Blake Holsey High (a.k.a. Black Hole High). ‘We’ll still be involved in production, but it will have to fit our Canadian program schedule,’ explains CanWest CFO John Maguire.
The discontinued operation of Fireworks (which was headquartered in Toronto, with offices in L.A., London and Dublin) cost CanWest US$125 million, according to its Q2 2004 financial report. The company also took a US$28.7-million non-cash writedown on the value of Fireworks’ library, which includes live-action tween drama series 100 Deeds for Eddie McDowd and Caitlin’s Way, as well as miniseries A Wrinkle in Time. L.A.-based investment banking firm Salem Partners has been hired to broker a deal ‘as soon as possible,’ and Maguire says the fate of Fireworks’ production slate – halved to US$36.8 million in 2004 – will be up to the new owners.
CanWest picked up Fireworks for US$29.4 million in 1998, and last year took a number of steps to stem financial losses resulting from ‘declining demand in international markets for its product.’ These steps, which included closure and outsourcing of Fireworks’ theatrical film development, production, acquisition and distribution activities and staff reductions, proved to be too little too late. In April, the prodco failed an internal review, which found Fireworks could no longer continue to be viable since there was no upturn in the international market on the horizon.
Fireworks’ recent history echoes that of fellow Canadian broadcast, production and distribution house Alliance Atlantis Communications, which abandoned its production of TV movies, miniseries and features last year. ‘We didn’t take our lead from them,’ says Maguire. ‘We’re all in the same boat, facing the same issues.’