Network may buy show amid Alliance move

The juggernaut “CSI” franchise will end up the sole property of CBS if the Eye forks out a pretty penny to buy out its current series co-producer and international distributor, Alliance Atlantis Communications.

That’s because the Canadian company is officially putting itself on the block in Canada, and the “CSI” property is not expected to be part of that selloff in the Great White North.

With its three Vegas, Miami and New York installments, “CSI” is arguably the highest-grossing American TV series franchise in both domestic syndication and in international sales.

The three series have been licensed internationally by AAC since the show’s debut Stateside seven years ago. Show was originally a Disney Touchstone and CBS co-production, but the Mouse House famously pulled out before the forensic procedural went to air, and the Eye brought indie distrib AAC aboard as its co-producer and foreign distrib.

On the domestic side, CBS sibling King World placed the reruns on cablers Spike (“CSI,” “CSI: NY”) and on A&E (“CSI: Miami”), with the New York installment pulling in a whopping $2 million an episode. (A weekend syndication deal also brings in record moolah to the profit participants.)

On the foreign front, each of the three series is reckoned to be bringing in north of $1 million an episode from foreign stations.

The “CSI” franchise has been the most lucrative programming property with which AAC has ever been involved.

CBS execs had no comment on what, if anything, the company may do to secure the entirety of the franchise, if indeed AAC is bought out in Canada. It’s also unclear if the contract between CBS and AAC allows for either partner to have first dibs on the franchise if the other has to pull out.

One source close to the Eye did say, “A deal is more complicated than you might think. Jerry Bruckheimer (the producer of the series) will obviously have a say in this as well.”

Were a deal to be struck, CBS Paramount Intl. TV, under prexy Armando Nunez, would be the distribution entity to oversee the rest of the franchise’s run abroad, which could, like the series Stateside, endure for another decade. There’s also been talk abroad of locally customized formats — “CSI: Paris,” for example — which that Eye unit would oversee.

In any case, the Canadian-based media player put itself on the block on Wednesday, with Winnipeg-based CanWest Global rumored to be the most likely to pick up the broadcaster, which analysts suspect has been positioning itself for a sale for months.

The company issued a statement before the markets opened saying that its controlling shareholders are exploring “strategic alternatives.” It has hired RBC Capital Markets and Bennett Jones as its financial and legal advisers, respectively.

A special committee of board members will look into the potential sale, including chair Robert Steacy, Anthony Griffiths and Barry Reiter.

AAC’s share price shot up 16% on the Toronto stock exchange following the announcement, closing at C$49.11 ($42.73). AAC shares have been climbing steadily since August, when they were at $27.84. They have risen nearly 20% in the last week alone.

The majority of voting shares of AAC, which has 13 Canadian pay channels and owns half of the “CSI” franchise as well as a controlling interest in Motion Picture Distribution, are held by Southhill Strategy, which is controlled by Atlantis founders Seaton McLean and AAC exec chairman Michael MacMillan.

“Southhill has informed AAC that no decision to sell Southhill’s controlling interest in AAC has been made and that Southhill may decide not to sell its interest,” according to the AAC statement. “If Southhill decides not to sell its interest, a sale of AAC is unlikely to occur.”

Announcement was widely expected, especially after AAC –traditionally an acquirer — put its distribution division on the block in October.

“Not a question of ‘if’ but ‘when,'” Merrill Lynch analyst Ihor Danyliuk said in a note to investors in October, though Danyliuk did not predict the company would move forward so quickly.

In the past CanWest has said it wants to up its domestic pay TV holdings, and although CanWest has a lot of debt, it recently put its controlling share of Network Ten Australia up for sale, which would free up cash for the transaction.

Other potential suitors include deep-pocketed pay TV broadcaster Astral Media, which has been trolling for acquisitions, as well as pay TV broadcaster Corus Entertainment and cabler Rogers Communications.

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