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Alliance Atlantis entertainment division being shut down

It's the end of an era for Alliance Atlantis Communications. Once Canada's largest production company, AA is being broken up following the close of its acquisition by CanWest Global Communications and Goldman Sachs for US$2.17 billion and its entire entertainment division is being closed down. AA's children's television VP of production and distribution Alan Gregg was handed his walking papers late last week.
August 20, 2007

It’s the end of an era for Alliance Atlantis Communications. Once Canada’s largest production company, AA is being broken up following the close of its acquisition by CanWest Global Communications and Goldman Sachs for US$2.17 billion and its entire entertainment division is being closed down. AA’s children’s television VP of production and distribution Alan Gregg was handed his walking papers late last week.

Gregg is not alone, of course. The entertainment division, including the company’s lucrative 50% interest in the CSI franchise and its television library, which houses its kids series such as Lunar Jim and Dragon Booster, is being shuttered. Accordingly, the division’s offices in Dublin, London, Sydney, Los Angeles and Toronto are being closed and approximately 70 staff members worldwide will be pink-slipped between now and January 2008. Licensing for AA’s TV library of about 1,000 titles is in the process of being outsourced.

‘We’ve become the most profitable part of the company — responsible for the lion’s share of Alliance Atlantis’ revenue, mainly because of the success of CSI,’ a former entertainment division employee said. ‘I’m disappointed that we didn’t build on that success. But company officers chose to sell at a time — probably wisely — at the highest possible point.’

Goldman Sachs now controls the entertainment division. The administration of the CSI assets was handed over to co-owner CBS around the time the US$2.17-billion deal was announced in January. Goldman Sachs says it has no plans to sell CSI or the other library properties, including the kids titles.

‘We like intellectual property and we like buying rights and developing them,’ says Gerry Cardinale, Goldman Sachs managing director of media and entertainment investing.

Motion Picture Distribution, which was 51% controlled by Alliance Atlantis and 49% publicly traded, is now also held by Goldman Sachs and Canadian partner EdgeStone Capital Partners.

As for the broadcast portion of the deal that involves the operation of 13 specialty cable channels in Canada, the division is being held in trust pending the hearing scheduled for early September with the country’s regulatory body the CRTC, but about a dozen staff have already been pink-slipped, according CanWest spokesperson Deb Hutton Hutton.

In the meantime, gone are top-line executives including CFO Dave Lazzarato, executive VP and general counsel Andrea Wood, and Ted Riley, executive managing director of international distribution. And going are executive chairman and co-founder Michael MacMillan and CEO Phyllis Yaffe, both of whom are stepping down.

Alliance cofounder Victor Loewy, who left MPD one year ago following a dispute with the board only to return as a consultant, is expected to be reinstalled in the executive suite. Rumor has it that the new management intends to bring in some new blood as well. Former Weinstein Company executive Charles Layton has been seen around MPD’s corporate offices, and observers expect that he may join the company in some capacity.

A version of this article first appeared in Playback Daily, sister publication of KidScreen Daily

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