Dutch music behemoth and emerging movie giant Polygram has grabbed U.K.-based vid distribbery Vision Video Ltd. from General Electric Capital Corp. for a bargain price, believed to be below $ 5.6 million.

That figure includes the assumption of VVL’s debts. It compares with the $ 83 million that Jonathan Krane’s MCEG paid for the company, then known as Virgin Vision, in July 1989.

In those days, Virgin Vision embraced theatrical and video distribution in the U.K. as well as video subsids in the Far East, Australia and a clutch of European territories. Now, VVL is mostly restricted to the U.K. sell-through market.

But while Vision’s fall from grace has been steep and rapid, the outcome is better than at one time seemed likely. CEO Bill Tennant, brought in two years ago to repackage the company as a salable entity, has fought off lawsuits and harsh trading conditions while slashing staff, closing down or selling off foreign subsids and shifting the focus of the business away from theatrical and video rental.

In the process, Tennant, a former agent and one-time senior VP of production at Columbia Pictures, more than once faced the prospect of closure.

Last year VVL achieved gross revenues of about $ 40 million and reportedly made a small profit.

Tennant’s management buyout seems to have been overtaken by the Polygram acquisition. He has bought the remaining foreign subsids with a view to closing them down and relicensing their libraries, as rights become available, through his new parent company. Polygram Video Intl. has marketing and distribution subsids in 26 countries.

A rival bid, backed by venture capital fund Gartmore, failed when VVL’s value fell below a level that interested the would-be investors. Gartmore also lost out to Polygram in the bidding for Palace, which, like VVL, had a substantial video library. (Polygram’s Palace acquisition subsequently foundered as the once feisty independent lurched into bankruptcy.)

VVL controls rights to some 1,400 titles, including 600 feature films. Among them are “Robocop,””Teenage Mutant Ninja Turtles” and “Hannah and Her Sisters.”

Tennant, who reports to Polygram U.K.’s senior commercial director Tony Pye, remains as managing director of VVL, which will now become a label within the Polygram video empire. The company will be reduced to a core acquisitions and marketing staff as Polygram takes control.

The deal finally frees GE Capital from a burden it never wanted. Krane’s MCEG bought Virgin Vision in July 1989 using loan capital provided by GE, Standard Chartered Bank and Virgin itself. By the summer of 1990, Krane’s tottering empire was in debt to the tune of $ 112 million, of which $ 72.5 million was owed to GE for the Virgin Vision purchase.

When MCEG finally collapsed, GE and Virgin found themselves owning 85% and 15 %, respectively, of Virgin Vision. Prexy Steve Bickel was replaced by GE nominee Raymond Godfrey on an interim basis. Then, in January 1991, Tennant, who had worked with Krane at MCEG, was brought in.

Virgin sold its stake to GE in July and the company was renamed Vision Video Ltd. At the same time, Tennant pulled out of theatrical distribution and focused on the sell-through market. A new acquisition policy, concentrating on non-theatrical titles in sports, music, comedy and special interest, saw VVL gain a U.K. market share of just under 5%.