UPDATED Nov. 25, 2010
Publicly-traded Ascent Media Corp. has inked an agreement to sell the Ascent Media Group creative services and media services divisions to Deluxe Entertainment Services Group. The deal, expected to close by year’s end, is for approximately $68 million in cash plus the assumption of an unspecified amount of debt. John Malone’s Liberty Media is the majority shareholder of Ascent.
The deal would bring together two of the world’s largest postproduction entities — and in doing so radically change the global footprint of the post industry.
It would also bring together two of Hollywood’s leading digital intermediate businesses: Ascent-owned Company 3, which is run by leading colorist Stefan Sonnenfeld (Alice in Wonderland, Pirates of the Caribbean: On Stranger Tides,) who also recently inked a first look producing deal with Paramount; and Deluxe-owned EFILM, which is home to respected colorists including Steve Scott (Iron Man 2, Julie & Julia).
In addition to Company 3, Ascent brands that are part of the deal include Method, Encore Hollywood, and Level 3 Post, in Los Angeles; and Rushes and Ascent 142, in London.
For Deluxe, 50% of its business is digital services (the other 50% is film), and this deal notably extends its reach into television and commercial postproduction. Ascent handles postproduction on such series as Bones, CSI: New York, and Glee.
Ascent has about 1880 employees. Deluxe confirmed that Sonnenfeld will remain with the company. But the impact of the deal on specific Ascent brand names, as well as the employees and the roles they will play, has not yet been determined, according to Deluxe.
Postproduction is an industry in continuous change due to rapid technological advancement. For a big player, it requires significant capital investment, but in this challenging time generally has slim margins.
On one end of the spectrum are large global businesses, notably Deluxe, Ascent and their chief rival Technicolor. On the other, are small, privately owned, entrepreneur-led ventures.
Liberty Media got into the post industry roughly a decade ago, when it acquired a number of leading independently owned postproduction facilities, including the Encore Hollywood, POP and Digital Magic.
Over the years, the umbrella company, now known as Ascent Media Group, maintained some of the individual brand names and consolidated or retired others. It also expanded its range of digital services. Currently AMG operates businesses across the US, as well as in London, Dubai and Singapore.
AMC has been conducting a strategic review with a goal of enhancing shareholder value, and this sale is a result of that process, a spokesperson related.
Some industry vets had additional observations about the deal.
“Since [Liberty entered the post business], the industry has been in a state of constant change, which on numerous occasions required tremendous capital infusions,” observed MTI Film CEO Larry Chernoff, the original founder of Encore Hollywood and prior Ascent exec. “As a ROI, I would say it has been a poor investment. They must have been looking at the next decade and asking if they want to continue under the same ownership scenario.”
Deluxe Entertainments Services Group is a global provider of film and digital services including postproduction, production, distribution and archiving. In business for 95 years, Deluxe is currently owned by MacAndrews and Forbes Holdings, led by businessman Ron Perelman.
Deluxe includes operations in Los Angeles and San Francisco, as well as Auckland, Barcelona, London, Madrid, Melbourne, New York, Rome, Sydney, Toronto and Vancouver.
Ascent Media will continue to own AMG’s content distribution and systems integration businesses, though it is pursuing “strategic alternatives” for both business units.