Universal Ends Distribution Agreement With Alliance

Alliance is now setting up its own distribution network in Canada.



Universal’s home entertainment division has ended its two-decade-long distribution agreement with  Alliance Entertainment in Canada, which is now setting up its own  distribution network there. Canadian customers have already been notified of the separation,  which takes effect July 1, sources close to Universal say .

Insiders say the change also was prompted by a steady decline  in revenue generated from the sale of Alliance product, which at one point  was responsible for upwards of $250 million a year. But with some of  Alliance’s  top sources of product, including New Line (now part of  Warner), no longer with the distributor, sales in recent years have been  under $100 million.

In light of the separation, Universal also is  restructuring its Canadian operations to be more in line with those of other  studios, the source said. Universal is reportedly the only one of the six  U.S. majors to still maintain an expansive Canadian operation instead of  just a smaller, sales-oriented team, but effective May 26, that is changing  to accommodate the decrease in Alliance product. Workforce reductions will  be staggered and begin June 30, continuing through the end of the year.  About 40 positions will be eliminated, the source said.

When contacted  for comment, Universal officials offered the following statement:  

“Universal Studios Home Entertainment has terminated its long-standing  arrangement with Alliance Films to distribute home entertainment products in  Canada. This move best satisfies Universal’s current business needs in the  territory.  As a result, we are adjusting our workforce in Canada to  accommodate this transition.  Going forward, Steve Dorman will remain  Executive Vice President and Managing Director and will continue to  effectively lead Universal’s Canadian home entertainment  operation.”

Universal is coming off a strong fourth quarter, led by  Despicable Me. The studio also has three major theatrical features in  the home entertainment pipeline, including HopFast Five, and  Bridesmaids.