Carlton pays $150m for film library
Wednesday 20 January 1999
The rights are part of the ITC library, which Carlton bought from Seagram, the Canadian drinks and music group, for $150m yesterday.
The library, formerly part of PolyGram Filmed Entertainment, includes more than 300 films and 5,000 hours of television. It increases the size of Carlton's existing portfolio, which includes the Carry On films and classics such as Brief Encounter, by more than 50 per cent.
The television library was originally built up by Lew Grade, the legendary television mogul who created programmes such as the The Saint for ITV in the 1960s. The films include titles such as The Boys from Brazil, Sophie's Choice and Farewell My Lovely, starring Robert Mitchum.
"The ITC library fits perfectly with our growing collection of television programmes and films," said Mr Green. "It gives Carlton even more to sell to the rapidly expanding number of channels world-wide. We have always believed that content is king and the ITC library is a jewel in the crown."
Analysts estimate that ITC has annual revenues of approximately $30m and operating profits of about $10m. The deal does not include Carlton taking on any of PolyGram's sales staff.
"This has been a long time in coming," said one observer. "If anything the price is at the lower end of what Seagram thought it would fetch." In a falling market Carlton shares closed down 6p at 536p.
Carlton will be able to use the library more efficiently by selling it through its existing distribution network. The films and programmes will also help fill Carlton Cinema and Carlton Kids, the new channels which are available on the ONdigital television platform, the pay-TV venture jointly owned by Carlton and Granada.
The sale is another step in the break-up of PolyGram's films division - best known for making blockbusters such as Four Weddings and a Funeral and Trainspotting - after the larger PolyGram music business was sold to Seagram by Philips, the Dutch electronics giant, last year. The Canadian group initially wanted to sell the film unit as a single division but took it off the market after the offers it received were disappointing.
Seagram has subsequently sold other parts of the library to MGM, the film studio, for $250m. However, yesterday's deal does not affect PolyGram's production and distribution businesses, which are being integrated into Seagram's Universal Studios division.
The deal is expected to be completed by the end of March, subject to approval from regulators.
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