Canada’s Competition Bureau won’t interfere with Entertainment One’s $174-million takeover of Alliance Films, clearing the way for the creation of one of the world’s most influential film distribution companies.
The deal, which was announced in September just as the Toronto Film Festival got under way, gives the combined company a market share greater than 20 per cent in this country.
The company will have a combined library of about 34,000 films and televisions shows, including megahits such as the Twilight series, Looper, Pulp Fiction, The King’s Speech and The Hunger Games. Some details of the deal have to be made public, such as what will happen to Alliance’s Montreal operations and what role its chief executive officer Victor Loewy will play in the merged company.
Film distributors have been struggling as the DVD market shrinks thanks to the collapse of the retail rental market and online piracy. But as the companies digitize their archives and make them available to services such as Netflix and content-hungry video-on-demand services, there is a new opportunity to make money from movies that have been sitting on the shelf for years.
“Our cost of delivery is lower and there’s no replication or trucks needed,” Entertainment One chief executive officer Darren Throop told The Globe when the deal was announced. “The issue we have to deal with is the conversion from a physical format to digital delivery via cable or iTunes or whatever comes next.”
The deal caps a tumultuous time for Alliance Films, which has rights to 11,000 films. Its parent company Alliance Atlantis Communications was acquired by Goldman Sachs Group Inc. and CanWest Global Communications Corp. in 2007, but was orphaned when Goldman sold the partnership’s broadcasting properties to Shaw Communications Inc. following CanWest’s bankruptcy.
Since then it has been held by Goldman, who made it clear to the company’s executives that it had no intention of running the company forever. Alliance was put on the block in late December.
Editor's note: An earlier version of this story incorrectly stated the total number of films and television shows the combined company would own.
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