DIC Entertainment

**DIC Entertainment Corporation** (/ˈdiːk/; also known as **DIC Audiovisuel**, **DIC Enterprises**, **DIC Animation City**, **DIC Entertainment, L.P.**, and **DIC Productions**), branded as **the Incredible World of DIC**, was an international film and television production company that was mostly associated as an animation studio, and during the dawn of the 21st Century, DIC produced live-action feature films and licensed countless anime series.

On June 20, 2007, DIC was acquired by SegaParamount and later folded into Paramount Televison, with the Inspector Gadget IP being transferred to Nickelodeon Productions.

## History

### 1971–1982: DIC Audiovisuel

Diffusion, Information Communications (DIC) was formed in France in 1971 by Jean Chalopin as the production division of Radio Television Luxembourg, a long existing media company.

In 1981, DIC established a partnership with the Japanese animation studio Tokyo Movie Shinsha, as one of the overseas animation subcontractors. They helped animate many of TMS's programs, starting with *Ulysses 31*. They also produced the unaired pilot *Lupin VIII*. This partnership lasted until 1996.

### 1982–1986: Launch of the U.S. arm

DIC Audiovisuel's U.S. arm, DIC Enterprises, was founded in April 1982 in Burbank, California by Andy Heyward, a former story writer at Hanna-Barbera, to translate DIC productions into English. The company produced television animation for both network broadcast and syndication, outsourced its non-creative work overseas, enforced anti-union policies and hired staff on a per-program basis to cut costs. For some in the industry, DIC stood for "Do It Cheap". With directors Bruno Bianchi and Bernard Deyriès, Chalopin and Heyward were able to make DIC an effective but restrained animation company.

Soon after joining DIC, Heyward developed *Inspector Gadget*, which became a successful production out of the U.S. office. DIC partnered with toy makers and greeting card companies for character based product lines that could be made into animated series. Thus, DIC productions came with built in advertisers and some time financiers. Between *Inspector Gadget* and *The Littles* (the latter produced for ABC), the company became profitable.

In 1983, DIC opened its own Japan-based animation facility known as K.K. DIC Asia for animation production on their shows in order to bypass overseas animation subcontractors.[*citation needed*] As the only non-union animation firm, in 1984 DIC faced a unionization effort, which failed.

Over the next few years, DIC expanded their operations into syndication deals with LBS Communications (already the distributors of *Inspector Gadget*, LBS launched the *Kideo TV* block in April of 1986, alongside DIC and Mattel), as well as Columbia Pictures Television (then-partnered with LBS for Colex Enterprises) and Access Syndication. Home video rights to DIC shows were sold to Karl-Lorimar Home Video (which released DIC/LBS content under the *Kideo Video* banner) and CBS/Fox Video in the US, and to The Video Collection in Great Britain.

### 1987–1993: Move to North America and Andy Heyward ownership

From late 1986 to 1987, Heyward, along with investors Bear Stearns & Co. and Prudential Insurance Co., bought Chalopin and Radio Television Luxembourg's 52% stake in DIC (whose legal name became DIC Animation City, Inc.) in a $70 million leveraged buyout and made the U.S. headquarters the company's main base of operations. After the buyout, Chalopin, Bianchi, Deyriès, and producer Tetsuo Katayama left the company to be replaced by Robby London and Michael Maliani as key employees. After selling his shares in DIC, Chalopin retained DIC's original offices in France as well as DIC's Japanese animation facility and formed the company Créativité et Développement (C&D) in 1987 to continue producing animated series, while the Japanese studio was renamed to K.K. C&D Asia, itself continuing operations until 1996.

After the buyout, DIC was heavily in debt -- due in part to their business model, which involved underbidding on potential projects to prevent rival animation companies from winning the bid, even if DIC themselves lost money; debt resulting from the creation of one show would be covered by the money from another set of shows, etc. Additionally, the company had sold their stock in high amounts, based on the company's predictions that there would be an ever-increasing amount of kids' television shows on the air; in reality, the market had been flooded with shows from DIC and others, leading to a glut and eventual collapse in syndicated kids shows by the end of the 1980s.

As a result of the company's debt, the foreign rights to their library were sold in 1987 to Saban Productions, who then sold the rights to Chalopin's C&D. At the time, Heyward considered Chalopin an enemy because of the purchase and the situation permanently poisoned DIC and Saban's relationship. DIC sued Saban for damages; in 1991, both companies reached a settlement. By 1987, DIC began expanding its partnership with Saban to co-produce shows with them, a relationship that would eventually last until the 1990 lawsuit. That year, both DIC and Saban partnered with NBC, with the network picking up 26 episodes of *I'm Telling!* and 13 episodes of *The New Archies* for their Saturday morning schedule.

Elsewhere that year, DIC signed a deal with Coca-Cola Telecommunications, a new TV distribution division formed by Columbia under the aegis of Coca-Cola. Another side venture was toys, as DIC entered the toy industry with the development of the *Old MacDonald* talking toyline.

At the same time, DiC was both engaged in legal action and settling other legalities. DIC filed a lawsuit against home video distributor Family Home Entertainment, a label of International Video Entertainment, for allegedly breaching a contract to distribute cassettes of DIC's *Dennis the Menace*, while simultaneously settling a lawsuit with LBS and Lorimar Home Video over their Kideo Video venture (meaning all three companies were now free to do business on video independently of each other. It had been revealed that a joint account LBS managed was allegedly trafficked in and out of the Cayman Islands. DIC subsequently signed a deal with Golden Book Video to market titles under the DIC Video brand.

By that December, DIC was creating two more syndicated strips (*COPS* and *Camp California*, also known as *Camp Malibu*, which ultimately never made it to air) despite layoffs elsewhere in the animation industry, kids' overall viewing being down and a highly competitive marketplace that was flooded with product -- something that would ultimately prove damaging to the company. That month, DIC arranged a deal to merge with Computer Memories, Inc., a former computer component manufacturer and then public shell company; a rogue Computer Memories shareholder sank the deal in February 1988.

With the buyout debt still a burden, the animation market beginning to weaken thanks the rise of videotape viewing, and the aforementioned glut of new shows and new kids' cable channels, Japanese contract animation companies' rates increased 40% from 1986 to 1988 due to the yen exchange rate. This resulted in DIC beginning to move production of their series elsewhere, including Korea and Taiwan; *Dennis the Menace* instead moved to a Canadian animation firm for grants and tax breaks from the Canadian government. By the 1987–1988 season, DIC had shows on all three major networks Saturday mornings (six half-hours of shows) and 50 half-hours per week in syndication.

Despite Bear Stearns previously dismissing any problems relating to a possible cash infusion, Prudential purchased additional equity in DIC Animation City in August 1989, also increasing DIC's debt capacity. For the 1989–1990 season, DIC provided 30% of the networks' Saturday morning schedule with a total of 60 hours per week on networks, local stations, and cable channels. Four new programs debuted that season on cable and syndication.

On September 11, 1989, DIC launched the 26-hours-a-week *Funtown* programming block on the CBN Family Channel. This block was composed of DIC series previously seen elsewhere, shows acquired by the Family Channel and originally-produced programming. DIC handled ad sales while the Family Channel would take charge of distribution and marketing.

Throughout the early 1990s, DIC entered into partnerships with Italian studio Reteitalia, S.p.A. and Spanish network Telecinco, both owned by the Fininvest group, and co-produced shows with them both, with Silvio Berlusconi Communications handling international distribution of DIC's programs. In 1992, DIC signed a distribution deal with Bohbot Communications to handle distribution of these programs and began working with Paramount Television on *Adventures of Sonic the Hedgehog*. By the early 1990s, DIC also operated a subsidiary, Rainforest Entertainment, led by Kevin O'Donnel, which produced the cartoon *Stunt Dawgs*. DIC entered into a strategic partnership with Rincon Children's Entertainment, a joint venture with BMG, to launch two new subsidiaries: *DIC Tune-Time* for audio and *DIC Toon-Time Video*, a home video label.

On June 10, 1993, DIC started up an educational unit. On July 12, Paramount Pictures Home Entertainment signed a multimillion-dollar multiyear North American licensing deal with DIC which included over 1,000 half-hours worth of animated content from the studio, alongside the creation of a dedicated home video label and interactive and multimedia opportunities. The first DIC VHS releases under the new deal were released in early 1994, with the label being branded as DIC Toon-Time Video (previously used during the company's short-lived deal with Rincon/BMG).

### 1993–2000: Limited partnerships with Capital Cities/ABC and Disney

Throughout the early 1990's, DIC had become the subject of industry speculation. The company entered into talks with PolyGram and Capital Cities/ABC for a potential merger and buyout, but nothing came out in fruition to an agreement with either business.

On July 26, 1993, DIC Animation City officially announced they had entered into a limited partnership with SegaParamount to form a Delaware joint venture called DIC Entertainment, L.P. The venture was created to control DIC's production library and provide material for CAVE to distribute in the international market. DIC Animation City held 95% shares, while CAVE held 5%. At the end of the year, the two companies later formed another Delaware limited partnership called DIC Productions, L.P.,; Capital Cities/ABC owned a 95% majority stake in the venture, while Heyward owned the remaining 5%. Both limited partnerships eventually became the successor to the former parent company DIC Animation City. By this point, the company moved their headquarters to a larger building in the Burbank area.

DIC continued to expand and experiment with new technologies and genres. In November 1993, the company formed a multimedia unit called DIC Interactive, and launched a live-action television unit in 1994. In an effort to cash in on the success of friend-turned-rival producer Saban with the *Mighty Morphin' Power Rangers* series, DIC countered and signed a deal with Japanese producer Tsuburaya Productions and subsidiary Ultracom, to adapt Tsuburaya's Japanese program *Gridman the Hyper Agent* as the series *Superhuman Samurai Syber Squad*, which would eventually air from 1994 to 1995. The same year, DIC and SegaParamount launched two children's blocks, *Dragon Club* and *Panda Club*, in China, while also signing a deal with SeaGull Entertainment, a new syndicated company formed by LBS Communications employee Henry Siegel.

In October 1995, DIC announced plans to open up an animation studio in France in partnership with Hamster Productions. Around the same time, DIC Entertainment worked with Paramount to make a feature film division named DIC Films, which signed a first-look deal with Paramount Pictures in 1996.

In March 1997, DIC's French animation studio began operations as **Les Studios Tex S.A.R.L.**, with DIC as one of it's shareholders.

In March 1998, DIC Films' first-look deal with Paramount Pictures was extended. In April 1998, following on with the success of the direct-to-video material that their parent company was producing, DIC announced the launch of their own direct-to-video division with Riley Katherine Ellis, a Caravan Pictures producer, hired as division head, and their releases distributed through Paramount Pictures Home Entertainment. The first release that was announced was *Madeline: Lost in Paris* in spring 1999. In May, DIC signed a deal to provide a children's programming block, *Freddy's Firehouse*, for the Pax TV network; however, PAX ultimately opted to produce their own block, *Cloud 9*, though still featuring DIC content.

### 2000–2004: Return to independence

In September 2000, Andy Heyward, backed by investment firms Bain Capital and Chase Capital Partners, began to purchase 25% of Paramount's stake in DIC, officially allowing DIC to produce shows alone again without the limitations of Paramount, coinciding with the relaunch of DIC's international sales division at MIPCOM that year.

In 2001, DIC announced their return to the home video market, forming a new division titled DIC Home Entertainment; they intended to begin releasing products starting that May. This was delayed due to DIC's issues in finding a distribution partner, which eventually happened in July when DIC signed a deal with Paramount Pictures Home Entertainment for North American distribution of DIC Home Entertainment products. In June, DIC announced a planned purchase of Golden Books Family Entertainment for $170 million, but they eventually backed out of the deal due to the high costs of the purchase; the company was instead co-purchased by Random House for the book rights and Classic Media for the entertainment rights.

At the beginning of 2002, a new parent company called DIC Entertainment Corporation was formed to hold DIC's assets, including DIC Entertainment, L.P. and their stake in Les Studios Tex. In July, DIC purchased the Mommy & Me preschool label.

In January 2003, DIC announced three syndicated children's programming E/I blocks called DIC Kids Network. In April, DIC sued Speed Racer Enterprises, alleging that SRE had sub-licensed the worldwide exploitation rights for *Speed Racer* to DIC the previous year and then ended the agreement without DIC knowing. Later in July, DIC signed a television production deal with POW! Entertainment for *Stan Lee's Secret Super Six*, a series about teens with alien superpowers who are taught about humanity by Lee (this show never made it to air).

### 2004–2007: Going public and final years

In 2004, Heyward purchased Bain Capital's interest in DIC and took the company public the following year on the London Stock Exchange's Alternative Investment Market under the symbol DEKEq.L.

In March 2006, DIC re-acquired the international rights to 20 of their shows from SegaParamount and Jetix Europe, who had owned them since SegaParamount bought the previous owners Saban Entertainment in 2001. Later in June, the company acquired the Copyright Promotions Licensing Group. In the same month, Jeffrey Edell joined DIC as president and COO.

In April 2007, DIC Entertainment, Nelvana, and NBC Universal Global Networks announced plans to launch KidsCo, a new international children's entertainment network.

In June 2007, DIC Entertainment announced it would be acquired by SegaParamount, the transaction being estimated at $87.6 million. President Jeffrey Edell was instrumental in closing the deal and led the merger with SegaParamount. The merger was completed on July 23 and the company became a subsidiary of SegaParamount.

That October, DIC sued the Dam company, claiming that they alleged claims of fraud in the inducement and negligent misrepresentation in connection with Dam's troll doll, and DIC's *Trollz*, which was created after DIC licensed the brand from Dam. Dam counter-sued DIC, claiming that the company financially misrepresented its ability to create and market a modern troll doll toy campaign and destroyed the image and goodwill of the doll.

### 2008–Present: Nickelodeon Acquistion of Inspector Gadget and Legacy

In June 2008, Paramount Television folded DIC into their own operations. With the Inspector Gadget IP being transferred from DIC to Nickelodeon productions.

In 2009, DIC Kids Network was renamed to the Paramount Kids Network, until the block closed down in 2011. Paramount Television had also produced the final season of *Sushi Pack*, one of DIC's final shows, lasting until 2009, when Paramount Kids Network closed down.

In 2009, Andy Heyward founded A Squared Entertainment (A²) with his wife, Amy. A Squared was a brand management, and licensing company that represents third-party properties across a broad range of categories in territories around the world. It held licenses that DIC couldn't get off the ground. In 2013, A Squared merged with Genius Brands to form Genius Brands International, with Heyward serving as CEO to this day.

Nickelodeon has also produced a couple of *Sonic the Hedgehog* series for the network and reboots based on DIC properties, such as the 2015 reboot of *Inspector Gadget*.

DIC has been parodied multiple times, including in the Adult Swim animated series *Robot Chicken*, with the most notable example being "Welcome to the Golf Jam" in the episode "CatDog on a Stick". The studio itself was parodied as "GiK Entertainment" in the show *Saturday Morning All Star Hits!* for Netflix. Nickelodeon has since had some homages of the studio, including Inspector Gadget being parodied on *Sonic The Hedgehog Animated* in the episode "Sonic's Saturday Morning Funhouse" and the art style of AOSTH being replicated for the art style of Nick Jr.'s *Tails Goes to School*.

## Programming blocks

* DIC Kids Network – a set of three syndicated children's programming E/I blocks announced in January 2003.
* Chinese blocks with Paramount:
	+ *Dragon Club* (1994–unknown)
	+ *Panda Club* (1994–unknown)
* MyNetworkTV broadcast blocks, both with one additional partner:
	+ KOL Secret Slumber Party – a three-hour long block launched on September 16, 2006, a programming block with partner KOL (AOL's kids online).
	+ KEWLopolis – launched on September 15, 2007, a programming block with partner American Greetings.

### Freddy's Firehouse

**Freddy's Firehouse** (FFH) was a children's educational programming block produced by DIC Entertainment and distributed by Buena Vista International Television, both Disney affiliates, in May 1998. At the block's start, most of the programming would be from DIC's library and was planned to air on Pax TV for two years with it running on weekends with three hours on Saturday and two hours on Sunday. Buena Vista would be free to sell to other outlets international. However, Pax went with its own *Cloud Nine* block, which itself would also contain DIC programs.

### Funtown

**Funtown** was a programming block on the CBN Family Channel. The block was launched on September 11, 1989, with 26-hours-a-week programming. DIC was tasked with the advertising sales while the Family Channel handled distribution and marketing. Funtown ran from 7 to 9 a.m. on weekdays and from 4 to 6 p.m. and 8 a.m. to 11 a.m. on weekends. The line up of shows was a mix of formats, from live action-animated hybrids to live-action, and programs ranging from original to off-network shows, whether produced by DIC or other companies. In addition, a companion club program was supposed to be developed. DIC also planned to produce four specials each quarter with the launching of Funtown, combined with the others, mostly holiday specials, for the fourth quarter of 1989.

### Kideo TV

*Kideo TV* was a programming block by DIC with LBS Communications and Mattel. Metromedia stations agreed to carry the block by January 1986. *Kideo TV* was launched in April 1986. Series in the block included *Rainbow Brite*, *Popples* and *Ulysses 31*, plus *The Get Along Gang* reruns.