Keefe, Lacey to ankle Zodiac Ent.

In a surprise move, 5-year-old Zodiac Entertainment Monday announced that founders Peter Keefe and Brian Lacey will exit the small but well-known niche player in the firstrun kids syndication business at the end of December.

Their departures follow Zodiac’s decision to cease all production activities, and turn its focus instead to distribution and library acquisitions.

Zodiac prez Kevin Morrison, who was traveling and unavailable for comment, issued a statement blaming the decision on competition from industry giants such as Disney, Fox and Warner Bros., as well as other established syndicators and toy companies.

“Unless you have the power of a major studio behind you, or the kind of leverage that comes with toy-driven programs, the domestic market cannot give us the return we need on our production investment,” he said.

Timeslot troubles

Zodiac’s costly firstrun offerings had been relegated by stations to poor early-morning weekday and weekend time periods, making it virtually impossible for the shows to generate acceptable national ratings.

There was also speculation that Zodiac’s decision to bail out of the production business may be tied to the pending merger between Britain’s Central Independent Television, which owns a majority stake in Zodiac, and the U.K.-based media conglomerate Carlton Communications (which also counts Technicolor among its U.S. holdings).

Zodiac distributed the highly acclaimed but low-rated strip “Widget” as well as the weekly “Mr. Bogus,” which is slated to become a strip in the fall after building up the requisite number of episodes. “Twinkle, The Dream Being,” meanwhile, is scheduled to go weekly in the fall after an earlier test run.

The three syndicated shows, along with a new series of “Twinkle” episodes and “M3D — Music in Three Dimensions,” will be a part of the syndicator’s program offerings at next month’s National Assn. of Television Program Executives confab in Miami.

Morrison credited Keefe, who has been director of production and strategicplanning, and Lacey, the company’s director of market development, with keeping the shows afloat in the wake of intense competition.

Although their deals are officially up at the end of the year, the pair no longer maintain office space at the Studio City-based company.

Spitzer’s situation

Andy Spitzer, Zodiac’s director of domestic distribution, reportedly is still aboard, but he did not return calls Monday.

According to Zodiac’s announcement, the new strategy of concentrating on acquisition and distribution is consistent with the objectives of Central Independent Television, which is actively seeking libraries to further expand its worldwide distribution network.

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