Finding gold in Classic fare

Studio deals vary, but co. holds tight to rights

NEW YORK — If libraries are hot, hot, hot — remember the tug-of-war for MGM? — a 4-year-old private company tucked off Union Square in Gotham is quietly sizzling.

Eric Ellenbogen launched Classic Media in May 2000 with a phone, a small office and $50 million in seed money from Pegasus Investors, Frank Biondi’s Waterview Partners and the Tisch family. The seasoned exec was previously CEO of Marvel Enterprises and prexy of Golden Books Entertainment and of Lorne Michaels’ Broadway Video.

With his $50 million stake, Ellenbogen went shopping, buying UPA Prods., Harvey Entertainment, Golden Books (acquired jointly with Random House) and Big Idea, parent of the animated VeggieTales video series.

Classic Media’s properties now include Mr. Magoo, Lassie, Rocky & Bullwinkle, Casper, Underdog, the Lone Ranger, Dick Tracy, Frosty the Snowman, Little Lulu and scores of others. Classic has a staff of 70 and $100 million in annual revenue. It’s solidly profitable, Ellenbogen says, although the closely held company doesn’t disclose financial results.

Classic Media, he says, is the largest private library of kids’ and family fare after Disney and Warner Bros. and the third largest comicbook concern.

“We’re New York’s hidden media company,” he says.

Constantly culling the library with the help of execs like prexy Robert Friedman, former New Line and (AOL) Time Warner exec, Ellenbogen and Classic have sprinkled the nation with licensing and merchandising deals and have a handful of film and TV projects in the hopper.

On the feature front, a new live-action “Lassie” with Firstsight Films and writer-director Charles Sturridge starts pre-production next month. Classic has covered all of the $20 million budget with international distribution deals and will offer the completed pic to U.S. distribs for possible holiday ’05 release.

A live-action “Lone Ranger” is moving forward with Columbia Pictures and producers Doug Wick and Lucy Fisher’s Red Wagon Prods., with director Jonathan Mostow and a new script by Laeta Kalogridis. A live-action/CGI “Underdog” with Spyglass Entertainment and a live-action/CGI “Sherman & Peabody” with Rob Minkoff’s Sony-based Sprocketdyne also are in development.

Each studio deal is different, but Classic is adamant about holding tight to its rights. “If it looks like the sale of a property, we just don’t do it. If the studios want the property, they should just buy it,” Ellenbogen says.

On the small screen, animated series “Gerald McBoing Boing” will debut in August on the Cartoon Network. A “George of the Jungle” animated series, produced with Studio B, debuts this summer on Cartoon Network Canada. A “Lamb Chop” series is in the works.

Lucrative perennials include “The Little Drummer Boy” and “Santa Claus is Comin’ to Town,” which have aired on ABC Family.

Classic execs stress the perpetual seasonality of their properties. Peter Cottontail is a big Easter draw; Halloween is heady for Casper the Friendly Ghost.

Classic’s “classic” characters are particularly attractive to retailers who are increasingly reluctant to put in big orders or save major shelf space for a property that’s not proven in the marketplace.

“We may not be white-hot, but you know who our characters are,” Ellenbogen says. “There’s no such thing as a fake hit in retail.”

Ellenbogen says he has no plans to take the company public, given the availability of cash from private equity firms, including his current investors. As Classic continues to mine its library and ink deals, Ellenbogen is cautious. “Hopefully, we’ll grow like an oak — not a weed,” he says.