Cary Brokaw's Avenue Entertainment Group, the production outfit behind The Player, Short Cuts and Drugstore Cowboy, has signed a letter of intent to merge with SolutionsAmerica Inc, an e-commerce company which specialises in facilitating digital business processes for the entertainment industry.

In a statement Brokaw said that the merger was intended to expand Avenue's revenue base to offset the cyclical nature of revenues in the film business. "[SolutionsAmerica] bring to Avenue a proven management team and a compelling e-commerce strategy. The SolutionsAmerica business model creates an exciting future for Avenue and it's shareholders. Expanding our base business, eliminating certain non-core operations and creating additional sources of revenues is necessary if we are to provide increased value to our shareholders," he said.

SolutionsAmerica plans to enable content providers, distributors, exhibitors and other entertainment commerce vendors to conduct their entire business operations over the internet. Under the merger, SolutionsAmerica's outstanding Common Stock will be converted into the right to receive a majority of shares of Avenue Common Stock.

Avenue, whose upcoming feature productions include The Courier to which Brad Pitt has been attached and HBO TV movie Wit starring Emma Thompson, signed a three year non-exclusive co-financing agreement in Feb this year with Intermedia. Intermedia will fund development expenses, co-finance production costs and internationally license all pictures undertaken by the two companies.