Toronto-based, publicly traded Internet and technology firm itemus has reached an agreement to buy an 80 percent stake in the services portion of New York-headquartered Shooting Gallery Inc. The stock deal is valued at $56 million.
The Shooting Gallery Inc. services businesses consist of commercial and music video house Shooting Gallery Productions, New York; Shooting Gallery Interactive, New York, which offers a range of new media client services; and the Gun For Hire production services and post facilities, with operations in New York, Los Angeles, Miami, Toronto and Vancouver, B.C. All these entities will be consolidated under a parent company simply known as Shooting Gallery.
The executive core of these operations remains intact. For example, Tim Clawson continues as president/executive producer of Shooting Gallery Productions, and executive VP of Gun For Hire. The commercialmaking shop was founded last year (SHOOT, 10/8/99), and the music video division was formally launched this past summer under the aegis of executive producer Kris Toledo-Foster (SHOOT, 8/25, p. 1). For commercials, Shooting Gallery Productions represents directors Richard D’Alessio and Peter Berg, director/cameraman Allen Weiss, and the helming duo Spooner/French (Nick and Andrew, respectively). Music video directors are Cameron Casey, Bill Yukich, Simon Brand and Aaron Courseault. Negotiations to bring on several more directors—for spots as well as videos—are currently taking place.
Not part of the itemus deal is Shooting Gallery Inc.’s content creation business, which will be spun off under Shooting Gallery Entertainment, a newly created, privately held company. Shooting Gallery Entertainment will encompass development of feature films, TV programs and music, as well as domestic/international distribution. Recent long-form endeavors include: director Bahman Ghobadi’s A Time for Drunken Horses and Mike Hodges’ Croupier. These were released through Shooting Gallery Inc.’s film series with Loews Cinemas—a program designed to showcase independent films. Additional long-form projects are Kenneth Longergan’s You Can Count on Me (set to be launched by Paramount Classics), Bob Gosse’s upcoming feature Julie Johnson, and a Bruce Sinofsky-helmed documentary on Sun Records, which is currently in production for television and theatrical release.
The itemus transaction is expected to close in January. Before then, itemus will invest some $7.5 million in Shooting Gallery in the form of a convertible bridge loan. This sum will help to fund expansion in facilities and staff, including the launch of Gun For Hire production services and post digital media centers in Germany and the U.K. Plans are also afoot to expand the staff base from its existing 200 employees. However, if the overall itemus deal doesn’t come to fruition, Shooting Gallery will have to repay the $7.5 million loan.
The decision to split Shooting Gallery Inc. into separate services and content creation entities was driven by market demand, according to its chairman/CEO Larry Meistrich, and president Stephen Carlis. "The businesses were really hard to explain to the investment community as a blended company," related Meistrich. "All the people interested in investing in service companies were scared of the film business, and all the people interested in investing in the film business were scared of the service companies. Then we found itemus, a company that was really complementary to our service business and was comfortable with us spinning out our content creation side."
In seeking an investor, Meistrich and Carlis had discussions with many potential buyers. They were drawn to itemus’ management group, and by the fact that itemus shared their vision of the future and had the experience required to execute this vision.
"With itemus’ incredible strengths in technology and operations, and our expertise in creative development and execution, we fulfill our mission to combine a creative focus with enhanced technology," said Meistrich. "We are big believers that marketing will become programming and programming will become marketing, and therefore it is going to be very important for advertisers to have a coherent voice in all the areas in which [the advertisers] touch the consumer.
"We are in discussions," continued Meistrich, "with a number of agencies now about doing work that combines both offline and online production, and delivers a very meaningful and powerful message."
Meistrich and a yet-to-be-named representative of Shooting Gallery will serve on the itemus board. A separate board for Shooting Gallery Entertainment will have Meistrich as chairman and Carlis as vice chairman. Additional Shooting Gallery Entertainment board members are still to be selected.
While film/television/music content creation and distribution will become part of a separate company, Shooting Gallery Entertainment, there will continue to be strong relationships between it and Shooting Gallery. "There’s going to be a real synergy between the two companies, not only in terms of one company servicing another, but the directors on the Shooting Gallery production side will still have access to all the feature film/television and short-form content opportunities that existed before," noted Carlis.
Jim Burns, CEO of itemus Solutions (itemus’ e-commerce arm), will serve as head of Shooting Gallery, integrating its operations with those of itemus.
In a released statement, Burns characterized the itemus deal with Shooting Gallery Inc. as being ideal given the convergence of traditional broadcast content production with Internet rich media. "To succeed in this market," said Burns, "solution providers need razor-sharp development skills combined with hardened broadcast experience that only comes from years of dealing with large-scale content production in film, television and advertising. With this acquisition, itemus now competes globally with proven, branded capabilities in one of the most important aspects of the emerging Internet—broadband and enhanced/interactive TV."
