Industry sources polled by Screen are unanimous in their belief that eOne’s acquisition of Alliance Films will create a rupture in the landscape, although opportunities exist for smart new operators to move into the space.
Privately everyone agrees that Canadian regulators will most likely approve the $230m transaction, ushering in a monopoly that eliminates a well-established buyer in Canada and the UK and drives up prices.
“In Canada, the combination (and the recent acquisition by Alliance of Maple Pictures) creates a virtual monopoly in the independent sector,” Amir Malin, the Qualia Capital founder and former Artisan CEO said.
“In the short run this will present difficulties for a great many independent features striving for distribution in the territory. In the long run it may create a compelling opportunity for another entity to enter the Canadian landscape.”
Foresight Unlimited’s Mark Damon has known eOne top brass Patrice Theroux, David Reckziegel and Brian Gliserman for years. “I do agree they will be stronger and will probably have more power in getting screens and keeping films on screens because they will be a bigger force,” Damon said. “What I am sorry about is that a buyer is gone and usually that means less competition for films.”
“We have got great relationships with both companies,” Exclusive Media sales chief Alex Walton (pictured) said, adding. “It’s a powerhouse and we want to be a key supplier.”
Privately, sources were not so welcoming of the news. “There’s no upside to the independent industry at all,” one prominent sales executive said, while another opined: “It’s scary. The international sector is volatile and this takes away a major distributor.”
Malin noted that lack of leverage in the filmed entertainment space continues to affect valuation, particularly for private equity firms. As a result, strategic buyers like eOne were more likely candidates for these type of transactions.