In what marks the culmination of a deal six months in the making, entertainment entrepreneur Sigurjon "Joni" Sighvattson has acquired a majority interest in Los Angeles-based production company Palomar Pictures. The purchase price was not disclosed.
Sighvattson, who was one of the founding members of bicoastal/international Propaganda Films, is now the chairman/CEO of Palomar Pictures. Palomar co-founder Jonathon Ker, who owns the remaining shares of the seven-year-old company, assumes the position of president and continues on as executive producer of the commercial division.
Palomar co-founder Anne-Marie Mackay, former head of the company’s music video division, will depart to pursue interests in longform projects. Mackay will continue to work with Palomar as an independent producer. In that capacity, she also renews her professional relationship with Sighvattson, a former colleague at Propaganda. Tom Lowe continues to serve as Palomar’s head of production.
The deal marks Sighvattson’s return to the commercial world four and a half years after leaving Propaganda, with whom he had a three-year non-compete clause. He most recently served as founding president of independent feature film production company Lakeshore Entertainment, which is on the Hollywood-based Paramount Studios lot; he departed that post last September, ending a four-year tenure.
"I thought it was about time I came back," said Sighvattson, who worked with Mackay when she ran Propaganda’s music video division-a position she held for six years. "It was great for me to have the opportunity to get out of the business and concentrate on making features, but I always liked this part of the industry," continued Sighvattson. "I’ve been thinking for awhile about returning to it in some form or another, and when I talked to Anne-Marie, it crystallized some of my thoughts."
Explaining he considers Palomar to be one of the "hidden gems" of the industry, Sighvattson praised Ker and Mackay for cultivating top-notch directorial talent on the roster. He also credited them with creating a diversified company, which grossed $35 million in ’98, and whose endeavors range from spots and videos to longform projects encompassing TV shows, documentaries and features in addition to interactive/new media ventures such as live-action/ graphics production for CD-ROMs (SHOOT, 6/6/97, p.28).
"There’s an opportunity in this industry today, and I think there will be a tremendous amount of change," said Sighvattson, who cited decreased profitability and ever-shrinking profit margins as the biggest changes that have already impacted the business.
"The more I looked, the more I felt Palomar was ready to take on the challenges of change," noted Sighvattson. "People keep saying there’s no business in the middle and that has a lot of validity-it’s either the mom ‘n’ pop shops or the big shops that are doing well right now. But I think there’s trouble on both fronts. I think Palomar, being in the middle, is extremely well-poised to use the best of both models, so to speak."
One part of the future production shop landscape, said Sighvattson, is spot directors crossing over to feature making. As one of the few commercial house owners with significant experience in the longform content realm, Sighvattson said he can serve as a viable conduit to the feature world. Providing this link, he contended, is something that many production companies have failed to do for their directors, due to lack of experience in that arena and the changes within the film business itself.
"Any commercial production company," said Sighvattson, "even if it’s huge, well-run and profitable, cannot support that kind of an undertaking. Last year, Lakeshore spent $150 million on the production of films and a significant amount on development. Unless there are other equity sources for that, I think it’s unrealistic. So we will stay in the content arena with our directors and we’ll fund the projects off-balance sheet [from outside sources]."
Sighvattson related he is now developing feature films with Palomar directors Neil Abramson and Nick Brandt. In addition, he and independent producer Mackay are slated to produce their first long-form collaboration: an adaptation for Mobil Masterpiece Theatre of Sandra Cisneros’ House on Mango Street.
Aside from feature opportunities, Palomar will continue to focus on its core commercial business. Sighvattson said the company will likely add directors at some point, but in the short term, he and Ker plan to concentrate on their current lineup of talent. Similar to his Propaganda tenure, Sighvattson will not be immersed in the day-to-day operations of the commercial division, but will focus on managing the directors’ careers and on running the overallcompany.
One of the first orders of business for the new management team is re-establishing Palomar’s music video division, which the company formally closed six months ago, around the time its three year old London operation was shuttered.
Ker said the closings weren’t financially motivated, but were undertaken in anticipation of changes in the company. "We wanted to downscale before we could grow again," said Ker. "Joni and I agreed we needed to have the flexibility of the music video department; it’s how we’ve grown our directors in the past." Sighvattson added, "Videos have never been a very profitable business, but they’ve always been great R&D."
A native of Iceland, Sighvattson came to the U.S. on a Fulbright Scholarship to study film at USC before joining the directors program at the American Film Institute (AFI). In ’86, Sighvattson joined forces with fellow AFI student Steve Golin (along with founding directors David Fincher, Dominic Sena, Nigel Dick and Greg Gold) to form Propaganda, which evolved into one of the industry’s premiere commercial and music video companies.
At Propaganda, Sighvattson produced or executive produced films including Wild at Heart (’90), Madonna: Truth or Dare (’91), Candyman (’92) and Kalifornia (’93), as well as such TV shows as Beverly Hills, 90210, and Twin Peaks. During his tenure, Propaganda earned a slate of commercial honors including the production-company-of-the-year Palme d’Or at the Cannes International Advertising Film Festival in ’92.
After he sold his interest in Propaganda to PolyGram in ’92, Sighvattson left Propaganda in ’94 (Propaganda was recently acquired by Sundance veteran/ entertainment entrepreneur Gary Beer; see SHOOT, 4/16, p.1).
In January ’95, Sighvattson joined the newly-formed Lakeshore Entertainment, where he oversaw production of such movies as Box of Moonlight (’96), Polish Wedding (’98), 200 Cigarettes (’99) and the upcoming Mark Pellington-directed Arlington Road. Sighvattson additionally oversaw Lakeshore’s foray into foreign sales, the establishment of Seattle-based record label Will Records, and the acquisition of film, television and music library Trans Atlantic Entertainment. He is also a leading shareholder in Channel 2, Iceland’s top private media company with interests in television, radio and mobile phones.
Following his stint as head of broadcast at London agency Bartle Bogle Hegarty from ’83 to ’87, Ker came to the U.S. in ’87 to start the now defunct Limelight USA, for which he served as executive producer of the commercial division. In Aug. ’92, Ker and Mackay opened Palomar, whose client list includes Coca-Cola, Nike, Honda, Miller, Budweiser and Kodak.
Palomar’s directorial roster is comprised of Abramson, Brandt, Buddy Cone, Breck Eisner, Veit Helmer, Jean-Pierre Jeunet, Melodie McDaniel, Jean-Baptiste Mondino, Randy Spear, Wyatt Troll and co-directors Mark Seliger & Fred Woodward. Also available for special projects are directors Alex Keshishian, David Mallet, Joel Schumacher and Ben Stiller.
The company’s sales are handled by Los Angeles-based Jim Robison who handles the Midwest region; L.A.-based Holly Ross of RED who covers the West Coast; and New York-based Phillip Alden of Claire Alden who handles the East Coast.
