Chelsea Pictures, the New York-headquartered house headed by president Steve Wax, has entered into a deal with Childrens Broadcasting Corporation (CBC), the Minneapolis-based, publicly traded company that recently shifted its core business from radio stations and programming to television commercial and feature production. Though financial details werent available at press time, Wax said that legally the transaction is a reverse merger whereby he gains CBC
stock in exchange for his ownership stake in Chelsea. A key stipulation in that arrangement, continued Wax, is that he contractually retains day-to-day control of Chelsea, a shop he founded back in 87.
The deal further extends CBCs holdings in the commercial production business. Separately, CBC-which is listed on the NASDAQ stock exchange-is the largest shareholder (49.7%) in Harmony Holdings Inc. (HAHO), the public parent company to a pair of shops active in spots: bicoastal/international The End; and bicoastal Curious Pictures. CBC executed the Chelsea deal independent of HAHO. Late last year, CBC also went outside HAHO to directly invest in the startup of Populuxe Pictures, a New York shop under the aegis of exec. producer William K. Near (SHOOT, 11/13/98, p. 1).
Wax explained that the CBC deal made sense given the realities of the spot production business. Its a way for a boutique to have financial leverage, he related. CBC provides Chelsea with a lot more financial support when it comes to competing for directors, opening new offices and moving into creative longform projects.
Two immediate byproducts of the financial wherewithal furnished by CBC, continued Wax, are the imminent opening of a Chelsea office in Hollywood, and the establishment of a feature development fund for director Mehdi Norowzian.
Previously Chelsea maintained an L.A. presence via its arrangement with the Hollywood office of bicoastal production support services firm Johnson Burnett Productions. But now, Chelsea is becoming truly bicoastal with its own full-fledged operation in Southern California. Wax said that permanent Hollywood space should be secured shortly.
Allison Amon
Wax has brought in Allison Amon to serve as Chelseas exec. producer. Though she will be based on the West Coast, Amon will share overall production and creative responsibilities for Chelsea with Wax. Amon has been freelance producing for the past year. Prior to that, she served as head of production at Palomar Pictures, Los Angeles. Amon succeeds Chelseas New York-based exec. producer Maddi Carlton who has moved on to bicoastal HSI Productions (see separate story, page 1).
As for the aforementioned feature development fund set up for Norowzian, Wax related that its important for companies to be able to offer their spotmakers tangible storytelling opportunities in longform. CBCs involvement, he said, makes that easier to accomplish. Nonetheless, Chelsea has managed to foray into longform on its own. Last year, the company released Unmade Beds, its first feature film, which was helmed by Chelsea director Nicholas Barker. Then Chelsea teamed with Norowzians London-based Joy Films to produce Killing Joe, a theatrical movie directed by Norowzian. Exec produced by Wax and Joys Desley Gregory, Killing Joe-an intimate drama about a boys coming of age during the 60s-will be screened for ad agencies and distributors in late March/early April.
Wax added that CBC is establishing a general feature development fund that other Chelsea commercial directors may be able to access. Chelseas directorial roster consists of a mix of talent stateside and overseas: the London-based Norowzian, Brian Baderman, Simon Cheek and Pete Salmi; Barker who shuttles between New York and London; Sydney-based Steve Rogers; David Gaddie whos in the process of relocating from Sydney to New York; and New York-based Simon Blake and Matthew Harris. Chelsea additionally handles spot directing representation for noted feature DP Janusz Kaminski, ASC, an Academy Award nominee this year for the Steven Spielberg-directed Saving Private Ryan.
Improved prospects for tangible feature opportunities, continued Wax, will make Chelsea more attractive to spot directors. Additionally, he said, We now have the capital resources [from CBC] that can enable us to be in serious running for directing talent. For an A-level talent doing at least $5 million in billings, there are signing bonuses involved and thats hard for a smaller, boutique operation to come up with. CBC can help fill that need for us.
CBC president/CEO Christopher T. Dahl noted that beyond the benefits cited by Wax, CBC offers more by taking a value-added approach to its family of production houses. The companies-like Chelsea-all operate independently, he explains. But we try to support them by providing access to other resources. Dahl cited as an example CBCs recent hiring of Mike Delgado as executive VP of marketing. The plan is for Delgado to build a marketing department that can help better promote the companies and their directors. This marketing program will complement the efforts of sales reps at the different spot shops. As we build CBC into a strong and creative force in the television commercial community, said Dahl, we want to apply our resources to developing our director talent and enhancing the individual company/division brands.
Dahl and Wax added that another cooperative effort in the works is the development of an FTP site on the Internet whereby CBC companies will be able to access a library of images for use in director proposals that can help garner prospective jobs. According to Wax, CBC plans to hire staffers to manage the FTP site for participating production houses.
Wax also foresees other intangible benefits of Chelsea being in the CBC family of companies. He noted that Chelsea, The End, Curious and Populuxe represent a community of artists and that certain business and creative synergies could develop between and/or among the shops when appropriate.
It seems to me that this industry has been very isolated from a company and a director standpoint, observed Dahl. We would like to unify that within our companies, getting executive producers to talk about industry trends, whats working and not working. Eventually wed like to see the same dynamic among our directors so that we have a community that can benefit from shared experience.
And Dahl envisions that community becoming larger. He said that CBC is looking at a number of other deals involving spot production companies. We have the capital to build something significant, he related.
CBC is indeed well capitalized, having recently sold its radio station holdings for around $71 million. Dahl affirmed that the investment in Chelsea is sound from a creative and business perspective. According to a CBC press release, Chelsea had 98 revenues of approximately $13 million and is expected to positively impact CBCs earnings.
