Seeking a strong handle onthe specialty films sector, Time Warner sister companies New Line Cinemaand HBO have jointly acquired Newmarket Theatrical Distribution for anundisclosed sum and formed a new jointly owned theatrical distributor of independentfilms headed up by former Newmarket Films chief Bob Berney.

Company name, staffingdetails and the initial slate will be announced in the coming days. Thestand-alone entity will release pictures produced by both HBO and New Line,acquisitions, and a raft of jointly funded titles of modest budget. Fine LineFeatures is expected to be folded into the entity in the coming months.

The new company will bebased in Newmarket Films' current New York offices and Berney will report toNew Line Cinema co-chairman and co-chief executive officer Michael Lynne andHBO Films president Colin Callender.

Meanwhile Berney's formerpartners at Newmarket Entertainment Group, William Tyrer and Chris Ball, willcontinue to distribute independent pictures and hold on to Newmarket's250-title library. Details on a replacement for Berney will be announced in duecourse.

Newmarket's upcoming slateof Don Argott's documentary Rock School and Arie Posin's suburban drama The Chumscrubber in alliance with DreamWorks SKG's Go Fish Pictures,transfer to the new entity.

Top brass from bothcompanies told reporters during a conference call yesterday [23] that the dealcame together in less than a month, and that they had not yet worked out theroles of existing theatrical staff such as HBO Films' Dennis O'Connor or Fine Line's Marion Koltai-Levine.

Berney had a close workingrelationship with HBO Films on the release of Real Women Have Curves in partnership with Newmarket in 2002; he was closeto sealing a similar deal on American Splendor after Sundance 2003, but the film was instead thefirst in HBO Films' new joint venture with Fine Line Features.

Ironically Newmarket hadengaged in well-publicised discussions with Paramount Pictures late last yearto become that studio's specialized division.

International sales anddistribution details will be cemented and announced in due course, howeverCallender was quick to point out that Time Warner siblings New Line and HBOhave a proven capacity to operate in the international market through their NewLine International and HBO Films London sales units.

"This is an opportunitywe've been pursuing since the inception of Fine Line," HBO chairman and chiefexecutive officer Chris Albrecht said.

"We found that our corporatemindsets were similar in terms of independent filmmaking. Bob [Berney] has aremarkable track record in independent film distribution and with this newpartnership HBO and New Line hope to provide him with the support necessary tobuild a very successful independent film distribution company."

"HBO Films had a greatrelationship with Bob Berney and Newmarket on the release of Real Women HaveCurves and of course we have had asuccessful run with the New Line family on such films as American Splendor, Gus van Sant's Elephant and Josh Marston's Maria Full Of Grace," Callender said.

"This new joint venture giveus at HBO Films a powerhouse distribution vehicle tailor-made to our needs andthe needs of the filmmakers we work with. It will help bring our diverse slateof theatrical films to the largest possible audience."

"In the course of ourpartnership with HBO, it became apparent that combining the talent, experienceand wherewithal of HBO and New Line in pursuit of the production anddistribution of quality pictures, would resonate in a significant way with thecreative community," New Line co-chairmen and co-chief executive officers BobShaye and Lynne said.

"The opportunity to buildthis organisation under the aegis of Bob Berney is exciting to us and to HBO."

Berney is arguably Hollywood'sleading independent marketing and distribution strategist and mastermindedhugely successful campaigns for such titles as The Passion Of The Christ,Monster, and Whale Rider. His other notable successes include My Big FatGreek Wedding, Y Tu Mama Tambien,and Memento.

"The pedigrees of both HBO,which has demonstrated its great passion to filmmaking and storytelling, andNew Line Cinema, with its brave and cutting edge history, combined through thisnew entity creates not only a great opportunity for my team at Newmarket butalso a tremendous new outlet for filmmakers and audiences alike," said Berney,who paid tribute to his former Newmarket partners' role in the success ofNewmarket Films.

"The sale of the unit to HBOmakes considerable sense: that unit has proven themselves in the market againstthe speciality units of the studios," Newmarket Film Group partner Tyrer said.

"The boom in that market hasseen independents effectively becoming mini-majors, where costs, whileattractive to studios, can still be prohibitive to the creative nature of indiefilm. Newmarket will return to our original goal of financing, and distributingthe work of independent filmmakers."