PolyGram to Purchase Library of 1,051 Films
PolyGram on Wednesday agreed to buy a library of 1,051 film titles for $225 million, including such modern classics as “Platoon,” “When Harry Met Sally” and “The Graduate.”
The collection was owned by French bank Credit Lyonnais. It amassed the titles through bailouts, bankruptcies, foreclosures and consensual transfers of several film companies over the last few years.
However, Credit Lyonnais itself ran into financial difficulties, and, in 1995, Consortium de Realisation, a French government-backed holding company, was formed to sell off its assets.
PolyGram Filmed Entertainment, established in 1992, said it is paying Consortium de Realisation $225 million for the library, which also includes “City Slickers,” “Fabulous Baker Boys,” “Blue Velvet,” “The Commitments” and “Conan the Destroyer.”
The deal should be completed by early 1998 and would take Dutch-owned PolyGram a step closer to its ambition of becoming a major player in the film industry, analysts said.
PolyGram said the acquisition would triple its existing catalog of 500 movies, and, with a total of more than 1,500 titles, make it one of the largest quality film libraries in the world.
“The acquisition is going to be financed out of existing group resources and will probably be finalized in mid-January 1998, depending on government approvals,” PolyGram spokeswoman Amanda Conroy said in London.
The libraries include catalogs assembled by independent production and distribution companies such as Hemdale, Castle Rock and Sovereign.
Michael Kuhn, president of PolyGram Filmed Entertainment, said a core part of PolyGram’s strategy has been to acquire film catalogs to complement its production of new films.
“The benefit of such an acquisition lies in its relatively predictable cash flows, which may be sustained and enhanced by the addition of new film production,” Kuhn said in a statement.
Most of the titles acquired are immediately available for video and television use.
Analysts welcomed the news, saying it was an important step in strengthening PolyGram’s presence in the film industry.
“With the arrival of more television channels and pay-per-view opportunities, demand for films will rise substantially or even explode if you’re very positive,” Andre Moons of ING Barings said.
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