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MTM, TVS blessed with IFE.

Why did International Family Entertainment buy MTM? "For several reasons," explained IFE's 38-year old CEO Tim Robertson. "First, we saw a large [2,000 hours] TV library that fit nicely with what we do. Second, we needed product for our European Family Entertainment channel, and a base in the U.K."

In effect, the Virginia Beach-based IFE purchased the remaining assets of U.K.'s TVS Entertainment plc, which included its TV studio facilities in Maidstone, its 500 hour program library and the Los Angeles based MTM Entertainment, Inc.

For the past two years, IFE had been looking for "something" that could fuel its entry into the U.K. and the European TV market.

Immediately after the TVS acquisition came the deal (now being finalized) with B Sky B, which is paving the way for IFE to enter the U.K. with its EFE, In effect, after losing its TV franchise,TVS will re-entery U.K.'s TV screens under a new banner.

The TVS acquisition will also help IFE to execute what Ronald J. Harris, IFE's v.p. new business ventures, called "the Coca Cola approach." That is, IFE will provide "the product" and find local "bottlers" in the Pacific Rim for Family Channel marketing. Similar expansion plans are also in the works for Latin America.

According to Robertson, the TVS acquisition cost $85; million, of which $11 million were in cash and the rest in IFE stock.

In the U.S., IFE Inc. operates the Family Channel, a 24-hour-a-day cable TV network serving 54 million homes generating revenues in the range of $120 million a year. The Family Channel was spun off from CBN cable operations in 1989, when its financial contributions to the tax-exempt religious-based parent company exceeded the level allowed by law. In 1990 the Family Channel was sold for $250 million to IFE, Inc., a new corporation owned by the Robertson family, TCI and Family Channel employees. TCI purchased securities convertible into 18 per cent of the common stock, while senior financing was handled by banks. Subsequently, in 1992, 10 million IFE Inc. shares were placed for trading on the New York Stock Exchange. At this writing, the IFE stock trades at $15.25 per share. Some 18 million shares are outstanding, out of 42 million issued. Holding the majority of share ownership, the Robertson family is firmly in control of IFE Inc., with the Rev. Pat Robertson as chairman and son Tim as CEO.

Can the Robertsons' Midas touch now reverse the fate of the money-losing TVS and MTM?

Before we to it over, MTM employees didn't even have a retirement plan," said Tim Robertson. They were losing over $7 million a year and couldn't afford fringe benefits." How does Robertson plan to make MTM profitable? "We cut overhead, changed management philosophy and implemented a profit-oriented production strategy," he explained. According to Robertson, MTM now has the added advantage of a Family Channel back-end user, plus an additional 400 hours of programs for its domestic syndication catalog from the Family Channel's co-production activities.

Part of MTM's restructuring involves streamlining management, a task that is left to Tim Robertson as chairman, Chuck Larsen as president worldwide distribution, and Bill Allen as president MTM productions. Under Larsen, but running his own show, is London-based Greg Phillips for international distribution. Yet to be appointed is the manager of U.S. syndication.

Much depends on the success of two pilots that MTM is developing for U.S. networks, IFE has to "front load" MTM with up to $12 million. The U.K. venture is expected to cost IFE an additional $20 million over a three-year period. The BSkyB deal will allow European Family Entertainment to reach initially three million homes in the U.K. EFE will be taking advantage of the satellite foot print spillover in a second phase which includes the development of an EFE channel Spanish and German.

Robertson hopes that heading EFE will be former MTM International CEO Tim Buxton. Currently, TVS' U.K. assets are looked after by Richard Warner.

How does Robertson plan to reassure Hollywood that particular religious considerations will not be imposed on MTM's productions? "Just look at the Family Channel," answered Robertson. "There is nothing to suggest a religious bias. Plus, if a commissioned product were unsuitable for the Family Channel broad viewership, we'd still make it other networks."
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Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:TVS Entertainment PLC, International Family Entertainment
Publication:Video Age International
Article Type:Company Profile
Date:Apr 1, 1993
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