For years, Splendid Medien had a reputation as a solid, if unexciting, video and licence trader. Andreas Klein is now reinventing the company as a multinational content owner. Patrick Frater takes stock.

Formerly known as a specialist video and licensing concern with a distinct taste for action films such as Rumble In The Bronx and Karate Tiger 2, Germany's Splendid Medien in recent years has moved upscale through its 49% stake in Graham King's Initial Entertainment Group (IEG). That has put it in the driving seat alongside Fox Searchlight on Steven Soderberg title Traffic. It is also calling the shots on Martin Scorsese's Gangs Of New York, the $110m Leonardo DiCaprio-starrer that is the most expensive film ever produced outside of a Hollywood studio.

Just as it has recently acquired a carefully-polished reputation at the top end of the world's indie production table, Splendid has fashioned simultaneously an enviable stock market rating. So what is it doing now'

Put nicely, Splendid appears suddenly to be expanding on every front. More harshly, the company could be likened to a child who has just been given his pocket money.

The answer has much to do with whether chairman and chief executive Andreas Klein is an optimist or a pessimist. He is probably a bit of both. And, he is unquestionably an opportunist. That is what comes from heading what is crucially still a family firm.

For all that, Splendid's name is currently linked to every juicy piece of corporate manoeuvring; this is no fly-by-night newcomer. Splendid was founded by Andreas' father Albert Klein in 1974. (Andreas has been in the business for 20 years.) Its initial focus was on purchasing and selling licences to mostly US films for distribution in German-speaking Europe.

Splendid added theatres in Bonn and in its home city of Cologne before selling these and moving into the video market in 1987. By 1994, following the deregulation of the television market, it had begun to supply films to television, a business that until recently accounted for 80% of group revenues. In 1990, Splendid diversified into audio post-production, mainly dubbing, and is today one of the country's largest post-production operators.

Theatrical distribution, however, has never been one of Splendid's strong points. It had a small distribution operation that has been allowed to wither. But this looks set to change following Splendid's deal with 20th Century Fox which will market the company's burgeoning slate in the German-speaking theatrical and pay-TV sectors for the next two years. Fox will be able to give Splendid the marketing and distribution muscle that it currently lacks, although a statement about the deal issued by Splendid this week, failed to mention the Muhammed Ali project that it recently boarded (see SI, Oct 20).

Klein says he intends to put out eight to 12 films a year through this route. But the IEG slate, and the association with Jodie Foster signed earlier this year, are unlikely to be enough on their own and Splendid is in the market for other titles. Klein has studiously avoided output deals, but has also shied away from buying big-budget US movies on the open market because he felt them to be overpriced and not supported by correspondingly rising TV rights prices. He now believes that prices being asked by sellers and paid by rival German distributors are 'normalising'.

That could mean Splendid will step up its activity as a German buyer, but Klein declares: 'I am more interested in buying copyrights for international markets.'

Its production deals with IEG, Foster and Catherine Zeta Jones give Splendid the chance to own German, European or world rights. In some cases these will be sold, but in others, it looks as though Klein is intent on handling more himself.

Splendid is believed to be one of four or five companies negotiating to acquire distributor RCV in neighbouring Holland. Klein will not be drawn on market rumours that he is angling to buy into Spanish distributor Manga. But with the IEG titles as a locomotive, Splendid is clearly an attractive partner and, like fellow video convert VCL Film + Medien, is in a position to capitalise on its flow of product.

What really seems to be turning Klein on at the moment is Splendid Television, a newly-hatched offshoot that will benefit from the same powerful calling card.

Headed by TV veteran Douglas J Schwalbe, the unit will acquire, co-finance and sell up to five high-value mini-series and TV movies a year. First will be the $9m two-part mini-series Victoria And Albert, produced by the UK's own2feet Productions for US network A&E. Splendid has worldwide rights outside the US and UK. Next up is TV-movie James Dean, co-produced by Splendid Television and the US' Five Mile River Films for TNT. 'I can't wait to show our clients our event movies,' Klein almost bubbled recently at Mifed.

He was nearly as enthusiastic when he dismissed the notion that the collapsing Neuer Markt could dent his expansion plans. 'We are not using shares for our deals and we are not selling our shares for cash. This is no more than an image problem.' If that is the case, he has little to worry about.

Financial analysts including Annelie Hoppe and Stefanie Fringuelli of Sal Oppenheim have fallen over themselves this year to praise Splendid's potential for growth and its lean management. Nothing, it seems, succeeds like success.

The analysts would like nothing more than for Klein to exercise his option to buy another 2% of IEG, which would take Splendid's stake to 51%.