Company Case Study #3 (return to index)

The Company:

Publicly traded award-winning but fledgling television production company that had grown to $100 million in revenue with global distribution.

The Challenge:
  • Despite rapid growth, the market value of the company had dropped substantially from the IPO price.
  • The company was facing increasing global competition.
  • An infrastructure capable of accommodating a growing international business with revenues in excess of $100 million was needed.
  • The investment community was skeptical of the company's ability to continue to achieve profitable growth.
The Solution:
  1. Established a professional management culture with accountability within an entrepreneurial and creative environment
  2. Developed a clear strategic plan to focus on:
    • the recurring revenue, higher margin broadcast channel business, as opposed to the capital intensive television production business
    • fewer larger projects with more certainty of cash flows before commencement of production
  3. Secured substantial ( $100 million) operating agreements with international distributors
  4. Provided more transparency to the investment community
  5. Acquired and/or launched new specialty cable channels, including introducing Canadian versions of successful US specialty channels
The Result:
  • Stock price sustained a 100% increase over a 3 year period
  • Merged with largest television and motion picture production company in Canada with the management of the original (smaller) company responsible for running the larger combined business.
  • Completed the largest entertainment financing in Canadian history ($545 million) to facilitate the merger
  • Market capitalization increased from $60 million to over $600 million