Company Town : New World Communications to Buy Cannell to Fill Fox Needs
After months of speculation, New World Communications Group Inc. announced Thursday that it plans to buy Los Angeles-based Cannell Entertainment for $30 million.
The move to buy the production company behind such television shows as ABC’s “The Commish” and USA Network’s “Silk Stalkings” will help New York-based New World fulfill a programming commitment made last year when the company agreed to convert 10 of its television stations from CBS, NBC and ABC affiliates to the Fox Network.
The deal would also reunite Cannell Entertainment President Stephen Cannell with Brandon Tartikoff, chairman of New World Entertainment, the Los Angeles-based programming subsidiary of New World Communications Group. The two worked together in the 1980s, when Tartikoff was chairman of NBC Entertainment and Cannell produced “The A-Team” and “Hunter” for the network.
New World’s demand for programming has grown since converting its stations because Fox has fewer hours of network programming during the daytime and late-night hours, Tartikoff said. Cannell Entertainment has at least eight hourlong programs in production or development, he said.
Analysts have anticipated the acquisition since December, expecting a deal valued at $50 million to $100 million. The purchase price is lower because Cannell decided to maintain control over his library of TV shows and make a long-term distribution deal with New World, he said.
The deal is expected to be completed in the next couple of months. The price for Cannell’s privately held production company will be payable in New World Communications Group convertible securities.