TV industry veteran Michael Jay Solomon has joined struggling production and sales group TEAM Communications as its new chairman and chief executive. He replaces Drew Levin who has resigned with immediate effect.
The company, which is quoted on the NASDAQ and Neuer Markt stock exchanges, last month warned that profits would be below previous expectations but Levin declined to quantify the problem. The company now says that the charge against operations for the year 2000 amounts to $21m, but warned that it could go higher after audit.
In January the company said that the problems related to changes in US accounting standards, which force it to accelerate amortisation on film assets and, second, its cancellation of some long-term film sales contracts. The second factor was portrayed as a move which would improve margins in the medium term, while Levin described the accounting change as a "non cash item" which did not change the health of the company.
In a statement the company now says that it "will report a loss for the year 2000 of between $18m and $19.5m or a potentially larger amount," and disclosed that it has "short-term liquidity needs," which Solomon says will receive his immediate attention. The company also admits it is likely to be in breach of the terms of its current bank finance arrangements.
The vastly experienced Solomon, former president of Warner Bros International Television and head of Lorimar Telepictures, said: "It is my hope that we can build on the increased production activities of 2000 and return the company to profitability as soon as practicable.''
One of the first measures is a $9m adjustment "related to the elimination of the company's investment associated with its 1999 acquisition of Dandelion UK." Restructuring of the UK operations involve the departure of TEAM Dandelion managing director Noel Cronin. Other measures include a review of its acquired film libraries.
Only last month TEAM secured a $45m commitment from the Canadian Imperial Bank of Commerce (CIBC) which allowed it to create a $50m production pool, TEAM TV Fund. It claimed to have secured sales in 45 countries at last month's NATPE for the MTV one-hour dramatic series Live Through This. Buyers included the UK's FlexTech, France's AB Sat, Holland Media, TV4 of Sweden and Showtime for the Middle East.