Crown Media Holdings

Crown Media Holdings, Inc.

**Crown Media Holdings, Inc.** (also known as **Crown Media**) is a United States media production company with corporate headquarters located in Studio City, California, and is controlled by Hallmark Cards.

Crown Media consists of Crown Media Productions and its Hallmark Hall of Fame, and the Crown Media Family Networks. Crown Media Family Networks is the Hallmark Channel and its spin-offs Hallmark Movies & Mysteries and Hallmark Drama in the United States.

## Background

Since 1951, Hallmark Cards has owned the Hallmark Hall of Fame anthology movie series and later its corresponding production company, Hallmark Hall of Fame Productions. From 1990 to 1996, Republic Pictures Home Video distributed Hallmark Hall of Fame films to home video market. From 1987 to 1992, Hallmark had owned Spanish language U.S. television stations then added in 1988 Univision Spanish-language network. Hallmark Cards had established with Jones Intercable in 1989 Jones Crown Partners, which owned ten cable systems all located in Wisconsin.

## History

### Crown Media

Crown Media Inc. was formed in 1991 by Hallmark Cards Inc. to purchase cable television systems and programming vehicles and was originally based in Dallas. Initially, Hallmark and Crown Chairman and CEO James Hoak owning 98% and 2% respectively. Hoak was formerly chairman of multi-system operator Heritage Communications and cable TV industry executive.

First Crown intended to create three geographic cable system groups with at least 1/2 million subscribers by the end of 1994. Crown initially purchased Jones Crown Partners plus another market system from Jones Intercable for a total of 140 thousand accounts. Cencom Cable Associates Inc., based in St. Louis owning systems with 160,000 subscribers and managing other systems with 390,000 subscribers, was purchased by the end of 1991. This made Crown Media a top 20 US multi-system operators (MSO).

With a planned move of Cencom's headquarters to Dallas in January 1993, its top executives left to form Charter Communications. Near the end of 1993, Hallmark evaluated its Crown Media holding, then with 800 thousand subscribers, by investment banker Goldman, Sachs. Crown Media sold its cable systems in June 1994 for $900 million to Charter Communications and Marcus Cable.

### Hallmark Entertainment

Crown Media thus shifted directions in 1994 with the sale of the cable systems. In February 1992, Hallmark Cards had formed Signboard Hill Productions as a production company for the Hall of Fame series and other projects for theaters or TV under president Brad Moore. Also in April of that year, Hallmark Cards purchased RHI Entertainment for $378 million plus $50 million in debt getting a 1,800 plus hours film library.

Hallmark Entertainment was formed in December 1994 with RHI and Signboard Hill becoming subsidiaries. Robert Halmi Jr. continued his RHI positions of president and CEO at Hallmark Entertainment.

Hallmark also purchased a 9.9% stake in Flextech. Hallmark Entertainment, with Flextech's assistance, then formed Hallmark Entertainment Network, Inc. in mid-1995 to start the Hallmark Entertainment Network (HEN) pay TV channel in Belgium, the Netherlands and Luxembourg. The company waited to start a domestic channel due to lack of carriage space and its programming domestic rights were held by others.

Hallmark Entertainment purchased in early January 1995 the Filmation library from Paravision, a L'Oreal subsidiary. Hallmark Home Entertainment division was formed by Hallmark Cards in January 1995 to distribute films to the home video market. Hallmark Home Entertainment, along with Cabin Fever, were acquired by Artisan Entertainment in 1998.

Hallmark Entertainment and The Jim Henson Company started a partnership in May 1998 to launch the Kermit Channel in Asia and Latin America starting in September 1998 with distribution handled by Hallmark Entertainment Network. The HEN channel had internationally about six million subscribers at this time. Hallmark Entertainment in November 1998 took a 22.5 percent stake in Odyssey Holdings, operator of the Odyssey Network. Hallmark hired former Fox Kids Network worldwide vice-chairman Margaret Loesch to overhaul Odyssey into a family channel.

### Crown Media Holdings

Crown Media was reformed into Crown Media Holdings, Inc. in 2000 as part of a re-organizational plan that included the company going public. Crown Media Holdings was formed as a subsidiary of Hallmark Entertainment (Hallmark). Hallmark, Chase Equity Associates, Liberty Media, and the National Interfaith Cable Coalition transferred Hallmark Entertainment Network, Inc. and a total of 77.5 percent interest in the Odyssey Network into Crown Media Holdings. Hallmark received all Crown Media Class B shares, which were worth ten votes each, thus control of Crown Media. After originally planned for April 2000, the initial public offering (trading on the NASDAQ under Ticker Symbol: CRWN) was delayed for market conditions until May 2000, se1ling 10 million shares at $14 per share for about $140 million. Hallmark president and CEO Robert Halmi, Jr. became chairman of Crown Media while hired IPO expert David Evans became president and CEO of Crown Media Holdings. While its channels had 50 million at the IPO, the company had not made a profit yet with Hallmark Entertainment Network, Inc. losing $35.5 million in 1998 on revenue of $23.7 million, and in 1999 it lost $56.7 million on revenue of $31.9 million.

German media company EM.TV & Merchandising, which acquired The Jim Henson Company in February 2000, had Henson company withdrawal from the Kermit Channel partnership with Crown Media. In November 2001, Kermit Channel Asia except for in India was shut down while Kermit blocks remained on the Asian HEN. The channel was discontinued in India in December 2002. Crown and Modi, its India distributor, had discussion about a replacement channel.

Crown Media started Crown Interactive company in the first of the year 2001 to allow affiliated companies' programming available in an interactive manner. This company attempt a video-on-demand service in Singapore. Loesch left her position as Crown Media US CEO and president in November 2001 at the end of her contract.

EM.TV & Merchandising sold in March 2001 Crown the remaining ownership in the Odyssey Network for a 8% of Crown stock. After agreeing to distribute a religious digital cable network among other items to lift restrictions on the Odyssey channel, Crown renamed the channel to the Hallmark Channel in August 2001 with plans to quickly add original programming.

In April 2001, Crown Media purchased 700 titles from the film library Hallmark Entertainment Distribution, a wholly owned subsidiary of Hallmark Entertainment, for its cable channels and Crown Interactive. In payment for the titles, Crown Media took on $220 million in debt and granted over 30 million shares of stock to Hallmark Entertainment. Hallmark's stake in the company was then about 65 percent of the company's outstanding common stock and completed on October 1, 2001. In March 2004, Hallmark Entertainment sold the Filmation library to Entertainment Rights for $20 million (£11 million).

Crown Media in January 2004 started the Hallmark Movie Channel as an outlet for additional movies and series available to the Hallmark Channel bur does not have the room to use. The new channel was on track in 2005 to have 9 million subscribers by the end of 2006.

In 2005, Hallmark Entertainment put the Hallmark Channel up for sale, but with disappointing offers with drew the channel from the market. Losing $233 million in 2005, Hallmark got a tax-sharing agreement allowing Crown's losses to applied against Hallmark Card's gains. Crown Media had $750 million in loans from Hallmark Cards out of a total of $800 million total loans against $1 billion in equity. While minority investors, Liberty Media International Inc. and JPMorgan Chase, might have sold, company management move to clean up the balance sheet and acquire new programming. Hallmark Channels in international markets were sold for about $242 million in 2005 to Sparrowhawk Media, a private equity group backed by Providence Equity Partners and 3i. In December 2005, Crown Media sold off its production arm to an investor group lead by RHI founder Robert Halmi Sr. and renamed back to RHI Entertainment. Crown moved to reduce staff by 20% to reduce $13-$14 million or more from the balance sheet in 2006. In June 2006, David Evans resigned as CEO then joined RHI as head of global new-media operations and channel. Crown Media had a 3,000-hour library worth $375 million by mid-2006. Crown Media then sold to RHI Enterprises, LLC its media library in November 2006.

In October 2006, Henry Schleiff was hired as CEO from Court TV to prepare it for sale and deal with cable carriage deals expiring (as the channel was at the time in 70 million homes). He would receive a bonus if the channel was sold.

Schleiff left as CEO in May 2009; he was replaced by Bill Abbott, previous ad sales head. Crown Media had about 1.1 million in debt thus is attempting to increase revenue and expected to refinance its debt in 2010. Schleiff left to attempt to help other small cable channel to become a major channel like he did with Court TV. He also increase the reach of Hallmark to 86 million homes at the time he left.

Abbott moved most movies to Hallmark Movies while attempt to move to a lifestyle focus similar to such as Scripps Networks Interactive channels. After two content deals for the Hallmark Channel in March 2010, Crown Media and Martha Stewart Living Omnimedia were in discussion about launch a joint venture channel, Hallmark Home. The potential partners were considering bringing in an private equity partner and talk to distributors.

Crown Media had placed an animated series based on Hallmark’s e-card characters Hoops and Yoyo into development in March 2010. Classic Media took charged of worldwide distribution of the *Hoops & Yoyo Ruin Christmas* holiday special which is pick up by CBS for a November 2011 debut.

In March 2011, Crown Media renamed its Hallmark Channels unit to Crown Media Networks. Hallmark Movie Channel was rebranded as Hallmark Movies & Mysteries in 2014's fourth quarter. Crown Media Holdings formed Crown Media Productions in March 2015 under programming executive vice president Michelle Vicary to fund six telefilms for 2015 and double that in 2016. In February 2016, Crown Media had taken over ownership of Hallmark Hall of Fame division from Hallmark Cards placing under Crown Media Productions.

On March 9, 2016, Hallmark Cards announced it was buying the remaining less than 10% of Crown Media Holdings traded publicly and taking the company private. Hallmark did so via Delaware's short form merger, which allows a parent company owning over 90% to bypass the subsidiary's board of directors and shareholders in approving the purchase/merger. The privatization was completed later that year.

NBCUniversal agreed to purchased Sparrowhawk Media, international operator of Hallmark Channel, in August 2007. With Hallmark trademark rights reverting in July 2011, Universal Networks International switched over the international Hallmark channels to either Diva Universal, 13th Street Universal, Studio Universal, Universal Channel or shut them down.

In October 2017, Crown Media launched two new services, Hallmark Drama channel on the 1st and Hallmark Movies Now, a subscription streaming service, on the 3rd. The company also indicated a publishing division was in the works.

## Units

### Hallmark Home Entertainment

Hallmark Home Entertainment division was a home video distribution company which was sold to LIVE/Artisan Entertainment.

Hallmark Home Entertainment division was formed by Hallmark Cards in January 1995 to distribute films to the home video market. With Hallmark Hall of Fame and RHI films owned films in home video market deals until 1996 with their primary distributors, Republic Pictures and Cabin Fever Entertainment respectively, the division had to acquire films to distribute from other production companies. The Samuel Goldwyn Company was first to sign with Hallmark Home a four year deal for new material in January 1995 with expectations to go exclusively with Hallmark as its library rights revert. By June 30, 1995, October Films had also signed a home video distribution deal with the company. Its first two released, "Eat Drink Man Woman" and David Mamet's "Oleanna,", were in the week of June 30. 1995. Another Hallmark Card production subsidiary, Signboard Hill Productions, was not expect to have films available to the unit until 1996. In 1997, Hallmark Home Entertainment worked with Binney & Smith and their board of educators in developing two Crayola branded kids lines, Crayola Kids Adventures, for ages 6 and up, and Crayola Presents Animated Tales, for ages 2 and up, both a series of three direct-to-video adaptations of famous children's novels. In December 1997, Live Entertainment, later Artisan, agreed to purchase Hallmark Home Entertainment. Hallmark Home meanwhile completed its purchase of Cabin Fever Entertainment, distributor of RHI films, in March 1988 from UST, Inc., former US Tobacco. Hallmark Home Entertainment, along with Cabin Fever, were acquired by Artisan Entertainment in 1998.

### Signboard Hill Productions

Signboard Hill Productions, Inc. was a production company owned by Hallmark Entertainment.

The subsidiary was started in February 1992 by Hallmark Cards for the Hall of Fame series and to leverage Hall of Fame production expertise towards additional projects for theaters or TV under president Brad Moore (continuing as division vice president for advertising and television programming) and Hallmark Cards executive vice president Robert L. Stark as Signboard chairman. Richard Welsh Company was retained to assist Signboard Hill in developing projects as it had since 1982 for the Hall of Fame.

With RHI, Singboard co-produced *Blind Spot*, the 177th Hall of Fame presentation starring Joanne Woodward, to have been shown in 1993. The company started filming its first solo production in June 1993 called *Breathing Lessons* for the Hall of Fame film in Pittsburgh with James Garner and Joanne Woodward. In July 1993, Signboard Hill Productions signed a production agreement with ABC for 10 two-hour TV movies. These movies would be co-produced with RHI to be broadcast on Saturday evenings during the 1994-95 season.

### Hallmark Networks

*Main article: Hallmark Networks*

Hallmark Networks is an entertainment network station in the United States owned by Crown Media Holdings, Inc., which operates entertainment channels for children in the United States, including Hallmark Channel, Hallmark Movies & Mysteries, Hallmark Drama, Hallmark Movie Channel and Hallmark Movies Now, and also broadcast more than five Hallmark brand channels available from September 10, 2012 through December 31, 2014.

Hallmark Networks was a joint venture of Crown Media, Cartoonverse Networks and Televisa. On January 1, 2005, Hallmark Networks was closed by Crown Media Holdings, Inc.

#### Hallmark International Networks

*Main article: Hallmark International Networks*

Hallmark International Networks is the international division of Hallmark Networks, which operates children's entertainment channels under the Hallmark brand, Ultratoons Network and Retro Toons Channel, in Australia, Austria, Belgium, Central and Eastern Europe, Germany, Luxembourg, Middle East, Netherlands, New Zealand, Russia, Sub-Saharan Africa and Switzerland. Hallmark International Networks was a joint venture of Crown Media, Cartoonverse Networks and Televisa. Halmark International Networks was dissolved on December 31, 2014.

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