EXCLUSIVE From Deadline|London editor Tim Adler: One of the best known names in the British film industry is now reviewing its options. Antony Fraser, the new interim CEO, expects to announce where the company’s going next within one month. But Fraser tells me that, under the previous management, overhead has been far outstripping income. “It’s about strategizing the business and getting costs in line with revenues.” He stresses that Handmade’s still very much in the international sales business despite the resignation of sales boss Guy Collins. Four more sales staff have also gone, including sales director Michael Ryan. Collins and Ryan have been involved in international sales scene as long as I can remember. Collins has bounced from sales agency to sales agency. Ryan used to be one half of J&M Entertainment, one of London’s most prestigious sales outfits in the 1990s (he was the ‘M’). J&M was where Summit Entertainment boss Patrick Wachsberger cut his teeth.
The company still employs 4 full-time salespeople. For now, there’s no plan for now to close the Los Angeles office. And the company is out there selling. In Berlin, Handmade Films International was pre-selling remakes of cult Brit thrillers The Long Good Friday, with Paul WS Anderson directing, and Larry Clark’s Mona Lisa. It recently sold a 44-title film package to Spanish label Video Mercury Films.
So what happened?
Founded by Beatle George Harrison in the 70s, Handmade’s credits include Lock, Stock and Two Smoking Barrels, Monty Python’s Life of Brian and Withnail and I and Time Bandits. Patrick Meehan, the former manager of Black Sabbath and Led Zeppelin, re-launched the company 3 1/2 years ago. Meehan had big plans. He’d secured the rights to the Eloise children’s books, which don’t mean much over here but have a lot of cachet in the States. Meehan announced a big budget Eloise in Paris feature, starring Uma Thurman.
Since then, Handmade has been as full of twists as some of its movie plots. Last October, Handmade bought the TV and merchandising rights to the Little Red children’s books written by Sarah Ferguson, the Duchess of York. It announced it was raising £17 million through the market, partly to finance this new children’s division — including a joint venture with National Geographic Kids and the purchase of U.S. animation producer Animation Collective.
Handmade then asked for its shares to be suspended on January 7th, prompting speculation about its financial position. In fact, this was the third time Handmade’s shares have been suspended. Shares were previously suspended in July 2009, when it failed to produce accounts on time. Staff, meanwhile, found pay cheques were late in arriving.
The group lost almost £1 million in 2008, compared with a £3 million loss the year before. Chairman Richard Northcott exited just one week after the shares were suspended for the third time. He’d only been in the job for two months. Bob Benton, former CEO of Ingenious Securities, took over as chairman. Last month Meehan resigned along with company directors David Ravden and Peter Parkinson. Meehan’s resignation may have had something to do with Thurman suing the company for £6 million. Thurman is arguing that not only has Handmade not paid her an agreed £2.8 million pay-or-play fee, but that she’s also lost earnings waiting for Eloise to start. She’s hired Bert Fields, Hollywood’s most feared showbiz lawyer, to represent her. The case will go to court on June 22nd.
Fraser, former managing director of Ingenious Ventures, the private equity arm of Ingenious Media, was parachuted in as interim CEO last month. Fraser is managing partner of boutique media investor Helix Capital. He’s a former director of TV distributor Target Entertainment. At the same time Handmade announced that it had borrowed £2 million while continuing to review its financial position. Half of that money paid off its £1.1 million overdraft with posh London bank Coutts & Co.
Asked why anybody would want to try and sort out such a tangled company, Fraser says: “What’s attractive about Handmade is that it’s got some great underlying content. And there’s still a lot of goodwill out there for Handmade.”