Vidcom Strives for Heavyweight Status : Post-production: The well-regarded maker of TV-show promotions hopes to enlarge its business through a merger.

Vidcom Post Inc. in Burbank has earned a good reputation over the past four years for its specialty: editing the “promos” that hype upcoming television shows.

In the world of video post-production, it’s a good business to be in. There are easily 100 local companies that offer post-production services such as editing, dubbing and graphics, and those companies vie for the same TV shows, movies and commercials.

But the use of promos is proliferating as networks, cable stations and independent broadcasters fight for shares of an increasingly fragmented viewing audience. And Vidcom hopes to ride that wave.

“Shows can be canceled,” said Charles A. Pennock Jr., Vidcom’s vice president of marketing. “They’re always going to be producing promos.”

Yet Vidcom remains a small player in a crowded field. In the nine months that ended June 30, the company earned $253,400 on $2.53 million in revenue. It has just 30 employees and its net worth--about equal to its assets minus debts--is a mere $1 million.

In contrast, such industry leaders as AME Inc., Compact Video and Post Group are more than 10 times Vidcom’s size and they offer a broader array of services and technology. That’s why even producers who say they’ve been pleased with Vidcom in the past are now using other post-production companies.

Steve Sohmer, producer of this year’s Emmy Awards telecast, has worked with Vidcom on promos for the launch of syndicated “Married . . . With Children” reruns. He described Vidcom’s services as “excellent.”

But when it came to editing the TV awards program, Sohmer turned to Compact Video. “A project like that,” he explained, “with massive amounts of video, all on deadline. . . there’s only a few places in town that could handle that.”

Leo Clarke, associate producer for HBO Independent Productions, used Vidcom for editing “It’s Garry Shandling’s Show” and “Good Sports,” both now canceled. But “Good Sports,” a Farrah Fawcett-Ryan O’Neal sitcom on CBS, was made on film and Vidcom can’t make film-to-tape transfers, which are necessary to broadcast any show on TV.

“In retrospect, I’d probably not do another film show at Vidcom because they just don’t have all the facilities that the larger places have,” Clarke said. “They’re going to have to triple in size before they compete with one of these larger houses.”

Which is exactly what Frank J. Celecia, Vidcom’s chief executive, intends to do. “My goal is to make this a major company,” Celecia said.

In May, Vidcom hired investment banker Gruntal Capital Markets to find Vidcom a merger partner. Celecia said he’s found a potential target--a video post-production company with about three times Vidcom’s revenue--and is preparing to make a merger offer that would leave Vidcom the surviving entity.

If the deal were to go through, Celecia said, Vidcom would add two important technologies to its bag of tricks: film-to-tape transfers and more sophisticated graphics. Adding such services would vastly increase Vidcom’s potential because most TV shows are shot on film and sophisticated graphics are in great demand for virtually all types of programming.

How Vidcom would finance such a deal isn’t clear.

The company’s stock trades at just a few cents a share, which virtually rules out a public offering as a means of raising capital, and it’s much harder these days to persuade lenders to finance takeovers. Celecia said a merger probably would be structured as a stock swap, with some cash changing hands and additional funds to be paid out of the company’s operations over several years.

Even if Vidcom consumes its rivals, what are its chances of joining post-production’s heavyweights?

An executive at Compact Video, which has about $50 million in annual revenue, dismissed Vidcom’s aspirations. “I think that Vidcom has a great niche,” said Robert Glassenberg, Compact’s senior vice president of sales and marketing. “But the big players are the big players. It’s a very slow and expensive process to grow in this business.”

Linda Rheinstein, vice president of Post Group, added that it’s tough for many post-production companies to compete because video technology is advancing faster than most companies’ bankrolls. As competition among TV programmers grows more heated, producers seek out the most sophisticated equipment and experienced editors who know how to use the equipment.

“It’s the most capital-intensive business you ever want to be in,” Rheinstein said.

For example, she said, digital video editing equipment is considered cutting-edge technology and is used for special-effects-laden shows such as “Quantum Leap” and “Star Trek: The Next Generation.” Digital offers far superior quality to the older analog editing systems. But installing a digital editing room costs about $2 million, as much as twice the cost of an analog system, Rheinstein said.

Celecia, however, is nothing if not ambitious. He recently installed a digital editing facility, which helped push Vidcom’s revenue up 16%, to $876,099, in its fiscal third quarter that ended June 30. But largely because of the expense of adding the digital unit, the company posted a quarterly loss of $13,329.

Vidcom also recently added a laser disk system that can instantly locate scenes that need editing and allows producers to send editing decisions over telephone lines by using a modem. With this technology, the company hopes to lure more sitcom business.

Vidcom also is in the process of installing a facility for editing magazine-format TV shows such as “Hard Copy” and “Inside Edition.” Those shows require special editing techniques because of the complexity of mixing old film footage, taped interviews and voice-overs.

Fancy machines aren’t the only way Celecia tries to win customers. Hollywood also demands lots of hand-holding, and each day he brings in a chef to cater lunches for clients as they work. And when producers and editors work into the night, Pennock, the vice president, thinks nothing of running out to buy bottles of Evian water or cappuccinos.

Celecia also isn’t shy about knocking the competition. He contends that such industry leaders as AME have grown complacent.

In 1989, AME was bought out by an investment group after the company’s founder, Andrew M. McIntyre, failed in his attempt to take the company private. Without McIntyre at the helm, Celecia said, AME “has no heart, no direction.” AME officials did not return telephone calls requesting comment.

And Vidcom? “Our approach is more of guerrilla warfare,” Celecia said. “We’re hungry, we’re lean and we’re anxious to serve.”

Celecia says Vidcom has another factor in its favor: the growing market for video services.

At one time, NBC, CBS and ABC were the only games in town, but now cable companies and alternative broadcasters such as the Fox Network have created a wider range of viewing choices. What’s more, video screens have begun infiltrating such non-traditional arenas as department stores, supermarkets, health clubs and schools.

“That just creates more of a need for our business,” Celecia said.

The 44-year-old New York native was practically born into the video business. Celecia’s father, also Frank Celecia, was an Emmy-winning cameraman for ABC’s “Wide World of Sports.” While still a teen-ager, the younger Celecia began landing TV jobs, working at various times as an editor, cameraman and sound technician. After a stint in the military, he returned to New York.

By the mid-1970s, Celecia had worked his way up to senior editor for “The CBS Evening News.” But Hollywood beckoned, and he moved West and started his own mobile production firm that contracted to do location work around the world. Celecia’s wife, Joanne, kept the books; today she is Vidcom’s chief financial officer.

After more than a decade of globe-trotting with his production crew, Celecia decided to return to post-production. Celecia launched Vidcom in 1987 with the proceeds from the sale of his newly built house and a $1-million line of credit from Sony to purchase some videotape editing equipment. The following year, he merged Vidcom with a publicly traded shell company.

At times, Celecia admitted, “I feel frustrated when things aren’t going as quickly as I’d like.”

But he insisted that his goal of becoming a major player in the video post-production business isn’t that far off. “This is a fragmented industry,” he said. “The opportunity to acquire private companies and put them under a tight management team is very real.”