Hallmark Entertainment Inc. has acquired the 8.2 percent stake in Crown Media
Holdings Inc. held by The Jim Henson Co. for $90 million, the companies
announced Monday.
Crown also announced that it has revised its program agreements with Henson
and its parent, EM.TV & Merchandising, substantially reducing its
programming obligations under those agreements for some $13 million.
Hallmark purchased nearly 5.4 million shares of Crown class-A common stock
from Henson. The shares were originally issued to Henson in March 2001 in
exchange for Henson's 22.5 percent interest in Crown Media United States LLC,
which operates Odyssey Network. Odyssey will officially relaunch as Hallmark
Channel U.S. Aug. 5.
By completing the stock purchase, Hallmark Cards and its subsidiaries will
now own some 36.2 million shares of Crown, or roughly 55.3 percent of the shares
outstanding. That interest controls approximately 91.4 percent of the voting
power.
Meanwhile, Crown United States has substantially revised two program
agreements with Henson and EM.TV under which it was obligated to purchase both
pre-existing and original programming.
As part of the new pact -- in which Crown United States paid $13 million to
Henson and EM.TV -- the company will now license only one series from the EM.TV
library and two new series, Hoobs and Construction Site, from
Henson.
'On Aug. 5, our domestic channel, Odyssey Network, will be officially
rebranded the Hallmark Channel. In conjunction with the rebranding, the
programming mix will be shifting more toward adult, family-friendly programming
and away from children's programming,' Crown president and CEO David Evans said
in a prepared statement.
'The revision of these agreements releases us from the obligation of using
programming that is no longer compatible with our strategy and gives us the
flexibility to revise our programming schedules to best suit the new focus of
our channel,' he added.
