Liberty Media is set to add a little more muscle to its entertainment holdings by Q3 2006 when it acquires IDT Entertainment. The Englewood, Colorado-based company that owns stakes in U.S. channels TLC, QVC and the Discovery Channel, will trade its minority share of IDT Corp. and pay US$186 million in cash to wholly purchase the entertainment division of the New Jersey-based company. It is also assuming approximately US$36-million in net debt when the transaction goes through. The acquisition will give Liberty the tools to create a catalogue of live-action and animated content for its multi-headed distribution system.
IDT, with subsidiaries that include Vancouver, British Columbia-based CG producer Mainframe Entertainment and Troy, Michigan’s home entertainment distributor Anchor Bay Entertainment, is a perfect complement to the company’s current holdings, John Orr, VP of Liberty Media, says. ‘A company like IDT Entertainment has some interesting growth prospects,’ he says, adding the company’s animation capability was one of the key reasons driving the acquisition.
Orr is quick to suggest that Liberty subsidiary Starz Entertainment will be the most obvious beneficiary of the new arrangement. Starz will commence a five-year output agreement with IDT Entertainment once the Liberty purchase is finalized. The new deal will give Starz’s network of 13 premium television channels, on-demand service and internet movie subscription site access to a pool of content, including animated shorts and a feature movie archive, to draw from after its current distribution setups with Disney and Sony expire.
IDT Entertainment first entered the cartoon arena with its purchase of Film Roman, the animation house behind The Simpsons and King of the Hill three years ago and has since followed suit by snapping up animation house Digital Production Solutions and securing part ownership in Stan Lee’s POW! Entertainment. The company will soon enter the full-length animated feature market with Everyone’s Hero – The Story of Yankee Irving, scheduled for release in September. At Cannes in May IDT also announced plans to produce US$40-million animated feature Sheepish, scheduled to go into production in 2007.