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Haimovitz: TV wiz sends Spelling sprouting.

If vertical integration is the game, Spelling Entertainment has plans -- big ones. Jules Haimovitz, Spelling's president and COO, is planning to start a TV network in the U.S. Haimovitz would not comment any further, but he is "talking with several potential partners on two or three ideas." Haimovitz, a former president of Viacom Network Group, was co-founder of Showtime and worked on the launch of MTV.

With $31 million in cash and $51 million in long-term debt, Spelling is considered "cash rich." "We can do many things," said Haimovitz. "We generate a lot of cash and we have the capital." Currently, however, Haimovitz is mainly interested in acquiring "software libraries" from anywhere in the world. "The product is better if it works better overseas," added Haimovitz.

Indeed, international TV sales is where the future seems to be for Spelling. In the 1990 annual report, Spelling listed international TV sales of $85.5 million, or 55.5 per cent of total "television product revenue." For this year, international TV sales are expected to reach $92 million, while domestic TV sales are estimated at $74 million.

According to Bert Cohen, Worldvision's COO, Europe's TV sales will increase by 15 per cent in 1991, to about $48 million, while Canada will remain stable at $15.5 million, and other parts of the world still fixed at $16.6 million. In its annual report, Spelling also lists $11.7 million as revenues from third party distributors, who are marketing some of Spelling's pre-1989 products.

In early 1989, Aaron Spelling Productions "merged" with Worldvision which, at that time, was owned by Great American Broadcasting Co. (GABC). The resulting structure, called Spelling Entertainment, gave 48.5 per cent ownership to Carl H. Lindner's GABC, 31.6 per cent to Aaron Spelling, and about 20 per cent is publicly held. A total of 35 million shares have been issued. In the process, GABC held back home video rights for Hanna-Barbera products, which are now handled directly by H-B. Hanna-Barbera is a GABC subsidiary. The fact that H-B is expanding in Europe with offices in London and Paris doesn't concern Haimovitz. "We sell Hanna-Barbera's catalog for television," he countered. "We may have an unpaid TV advisor there," he said, regarding H-B hiring people with TV expertise.

Last November, Spelling added a new division, Spelling Films International, under Ian Jessel, who has the task of selling theatrical and home video rights. However, according to Haimovitz, Spelling Films will not be producing, but acquiring, movie rights from independent producers, since he "doesn't like the risk" of theatrical products. Unfortunately, "not too many independent movies are being made," said Haimovitz, who would not comment on the size of the acquisition budget for Spelling Films. Theoretically, Worldvision should be responsible for selling the TV rights of Spelling Films, but in actuality, Ian Jessel "can market TV rights on his own."

Spelling's two production units (Aaron Spelling Productions, under Aaron Spelling and Laurel Entertainment, headed by Richard Rubinstein) are now producing some 18 hours for the U.S. TV networks and working on two pilots, while Worldvision has distribution rights to seven new pilots.

This, in addition to Beverly Hills 90210 series, which has been renewed, and other Hanna-Barbera productions for the new season, including Fish Police, an animated prime-time series for CBS.

According to John Ryan, Worldvision's CEO, they "don't have the international rights for Tarzan," a series Worldvision developed for U.S. barter syndication as a French/Canadian/Mexican coproduction.

Is Spelling for sale? "No," said Haimovitz, "It has been off the market since last August." Haimovitz said that his trip to Japan was not to find a buyer, but for "strategic reasons."

One thing is for sure, Haimovitz, considered a wizard with numbers, could now be taking Spelling to new heights.
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Title Annotation:Jules Haimovitz; Spelling Entertainment Inc.
Publication:Video Age International
Date:Apr 1, 1991
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