BERLIN — Financially troubled German kidvidder RTV Family Entertainment and Canadian group Nelvana Intl. ended a mutual output deal Tuesday.
RTV is returning the license rights for 15 series, while Nelvana, which has waived any claims against RTL, is returning six shows.
The agreement, inked two years ago, was to expire in December. RTV said further acquisitions from Nelvana would have resulted in losses of more than $3 million.
“In the current market and due to RTV’s stretched liquidity, a major cash-flow improvement is more important than building up a library,” RTV said in a statement.
Company added that all signed sublicense agreements for TV, video, music and merchandising rights will be honored.
RTV has slashed its expected net sales for 2002 in half to €30 million ($29.79 million).
As a result of the deterioration of its distribution markets, RTV recently announced extraordinary depreciation for 2002 of some $99 million in writeoffs related to its program rights and subsidiaries. It expects this year’s operating profit to decline even further in light of the return of the Nelvana content, which means a further $8 million writeoff.
Nevertheless, RTV is optimistic it will stay afloat and is planning to capitalize on the license rights it’s getting back from Nelvana. “The major cash-flow improvement constitutes another building block of the RTV turnaround plan,” the statement said.
RTV was broadsided by the collapse of local TV giant Kirch, one of its main buyers.