Paramount Buys 49% Stake in British Television Firm

Paramount Pictures said Thursday that it has bought 49% of Britain’s largest independent television production company to bolster the U.S. studio’s foreign operations as Europe nears the barrier-breaking year of 1992.

Paramount’s investment in Zenith, the independent production subsidiary of London-based Carlton Communications, represents an increase in Paramount’s commitment to foreign production in the face of growing demand for original programming, said Mel Harris, president of Paramount’s Television Group.

“The primary focus is on serving the ever-expanding European market including Eastern Europe,” Harris said in an interview. “That’s a growth front for Paramount.” Paramount already produces three television series in Canada and two in Australia.

The transaction will give Zenith, which produces dramas, game shows and other programming, access to Paramount’s global distribution operation, Harris said. Terms of the deal were not released.

The move could also help Paramount deal with foreign television quotas established recently by the European Community, analysts said. The 12-nation alliance recently approved a non-binding quota limiting foreign programming to 50% of all transmissions.

“I wouldn’t think it’s a matter of getting around (the quotas),” said Jeffrey Logsdon, an analyst with Crowell, Weedon & Co., but it could assist Paramount by providing a partner that understands the social and political climate in Europe.

Harris said Paramount’s strategy was set long before the EC vote.

“I think that because of the demand for programming, the quotas are going to end up being moot,” he said, adding that demand for locally produced programs also will continue in Europe.