TORONTO — And then there were none.
A tepid syndication market has taken another victim, as CanWest Global Communications announced Friday that it is putting what remains of Fireworks Entertainment on the block and taking a C$200 million writedown ($149 million) on the production and distribution arm.
“Given the current state of international film and television markets, and the likelihood of a prolonged downturn in those markets for Fireworks’ product,” production and acquisition by Fireworks will be shelved immediately, but the company says it will continue to distribute until a buyer for the division, which includes its film and television library, is found. It says it is in discussions “with a number of parties.”
The writedown will be reflected in the company’s second-quarter fiscals, ended Feb. 29. In the future, Fireworks will be reported separately and categorized as discontinued operations.
“It has become clear that sound business principles could no longer justify the Fireworks business model,” CanWest prexy and CEO Leonard Asper said. “We believe that this action should contribute positively in the future to the company’s improved free cash flow and further debt reduction.”
Fireworks was purchased amid much fanfare in 1998 for $30 million as Winnipeg-based CanWest’s production and distribution arm. The company, which at one time had offices in L.A., Toronto, London and Dublin, depended heavily on the syndication market.
With the international market in decline, CanWest has been ramping down the division over the past year, closing and outsourcing its feature film activities and laying off staff. Fireworks founder Jay Firestone was let go in May, and CanWest exited features to narrow Fireworks’ focus to the North American TV market.
“Nevertheless it has become clear that the steps taken to date have not been sufficient to restore Fireworks to profitability and ensure its long-term viability,” a company statement said.
The move follows in the steps of Alliance Atlantis Communications, which in December iced much of its production division, and Bell Globemedia, which within the last year quietly divested itself of Landscape Entertainment and its interest in Artisan Entertainment.
With Fireworks’ demise, Canada no longer has a single large production entity.
The company says its subsidiary Global Television will continue with some TV series production for itself, as well as with ongoing productions like “Wild Card” and “Strange Days at Blake Holesy High.” The fate of series such as “Mutant X” and “Gene Roddenberry’s Andromeda” is uncertain.