DHX Media Shifts Los Angeles Work-For-Hire Studio Production to Canada

DHX Media Logo - H 2012
DHX Media

The Canadian producer anticipates bigger margins from more favorable film tax credits in Vancouver after acquiring Cookie Jar Entertainment for $112 million.

TORONTO – Canadian indie producer DHX Media is shifting its U.S. work-for-hire production from Los Angeles to Canada.

The Halifax-based company, which is seeking cost savings after recently acquiring Care Bears owner Cookie Jar Entertainment for $112 million, on Thursday said it is “winding down” low-margin Los Angeles service studio work.

Over the next year, DHX Media will shift that work up to higher-margin animation studios in Canada, likely in Vancouver, where it enjoys more favorable film and digital production tax credits.

The Canadian producer last year did around $20 million in production on four series as part of its work-for-hire load, including HBO’s Ricky Gervais Show and DreamWorks’ Dragons: Riders of Berk.

As it revealed its Q2 2013 results Thursday, DHX Media indicated that both its work-for-hire and proprietary production slates were down, while distribution revenue was up sharply after the Cookie Jar acquisition.

DHX Media saw net income for the three months to December 31, 2012 fall sharply to $287,000, against a profit of $1.83 million in fiscal 2012, on overall revenue up 7% to $26.3 million.