If you can find me a better image of an old Playback Magazines...
ALSO, does anyone know Cheryl Binning? I've searched up and down, cannot seem to find any reference, link of info.
Mackerel Belly Up, While Owl flounders
From Playback Magazine: Jul 14, 1997
Mackerel belly up, while Owl flounders
by: Cheryl Binning
Up and running for a mere six months under Gordon Haines' Combined Media parent company, Mackerel Multimedia has closed its doors for good after a nine-year run. Sister entity, 21-year-old Owl Communications, has laid off its 40-member staff, put its tv productions on hold and is in the process of restructuring and weighing its options, which include negotiations with potential buyers.
The announcement comes behind a January deal between the three companies which saw Owl drop its non-profit status and join forces with ex-Alliance coo Haines and a group of venture capital investors to form Combined Media, which owns 90% of Owl Communications and 50% of Mackerel Interactive.
Combined Media provided the working capital to embark on an ambitious business plan, projecting to double Owl's production slate this fiscal to 40 hours, up from the 15 to 20 hours produced last year, and break into high-budget family programming in the $800,000 per half-hour range. Mackerel was expected to expand as it twinned these properties with multimedia packages.
"Mackerel is out of business we're essentially bankrupt, we've been served our notice," says Mackerel president Gord Gower, citing hefty overhead, delayed production starts and cash flow problems culminating in Combined Media using up its line of credit.
The company had until the close of business Friday, July 4 to get an extension of its credit with its bankers. Negotiations failed, says Gower, because primary investor, the Working Ventures labor investment fund, refused to make a deal.
Gower says Combined Media and sister company Owl left Mackerel exposed to far too much debt to continue operating and the decision to shut down his company was made when the financial difficulties first surfaced. "At that point in the picture, Mackerel was going to be the last entity standing and, because of the way the deal was structured, Mackerel would have had to assume all the debt generated by the other companies," he explains.
"That's where we decided to close it off we could have shaken ourselves of the debt by collapsing Mackerel and finding other partners to reopen it, but there just wasn't the will to do this on the part of the partners."
Gower says he is looking for a job in the multimedia arena and is considering a move to the u.s.
"Owl Communications is not in receivership at this time," says president Annabel Slaight of the company she founded, which operates both a television and publishing division. As to details of its restructuring plan, Slaight is not commenting at the present time but says her mission is to rescue the company.
"My greatest hope is that Owl continues as a multiple-media company. There are tremendous growth opportunities for Owl in all the medias we are involved in publishing, tv and multimedia."
Owl was set to coproduce the 26-episode $3-million live-action kids series The Max Show with Saskatchewan's Heartland Motion Pictures. Heartland president Stephen Onda says the project was ready to go, with broadcast licences secured from tvontario, scn and Vision and Telefilm funding confirmed, when word of Owl's difficulties came to light. He says the project is not dead and all financing participants have agreed to give them time to work out the situation. His company is looking at various options while "waiting for Owl to sort itself out."
The second season of the Mrs. Cherrywinkle series for Family Channel was scheduled for a late summer shoot. Slaight indicates she expects the project to go forward.
Mighty Mites, a $300,000 per half-hour combined live-action/animated series, had been in development for CanWest Global, but prior to any indication of Owl's financial troubles, vp of Canadian programming Loren Mawhinney says the broadcaster had elected not to go into production on the program.
Although no broadcaster has licensed the show as yet, Phyllis Platt at the cbc confirms they had entered discussions with Owl to license the property and talks were also underway to develop a half-hour drama series for adolescents. Owl tv, she adds, has withdrawn both projects from the table for the present time.
Mackerel recently launched a $500,000 Mighty Mites site for America Online and had $500,000 worth of projects in production, including a farm/agricultural product Website for Monsanto and a deal to relocalize kids' educational products for Scholastic Canada. This work will be completed by the staff working as freelancers. Another $1 million worth of projects was pending, including a fee-for-service interactive project for The Max Show.
According to Gower, problems began when Owl Television and Mackerel failed to generate the cash flow they were anticipating and the working capital Combined Media brought to the January deal did not provide enough of a window to get their ambitious slate of projects off the ground. This was compounded by the debts Owl and Mackerel brought into the deal, the high overhead required to move into a new building, realign the companies and set up the revamped infrastructure at Owl tv, which included a large number of employees in administration and business affairs as well as a 10-member production team.
"There was infrastructure built up for tv production but the actual production lagged behind what was anticipated." he says.
The straw that broke the camel's back came when unexpected delays in putting the Cherrywinkle and Max deals together pushed back production starts and left gaping holes in their cash flow, says Gower. This also pushed back Mackerel's Max interactive project, taking another brick out of an already crumbling wall.
"If Combined Media had brought in another couple of million we would of had a much larger window to overcome these shortfalls," he says.
As independent companies, both Owl and Mackerel had run a lean ship, better equipped to handle these financial hurdles. On its own, Gower says Mackerel would have survived these bumps in the road, but adds he has no regrets about teaming up with Combined Media.
"It was the right idea at the right time and necessary for expansion," he says, adding that Mackerel missed some of its projected production targets. "We took a small interactive media company and put it into a larger organization with larger overhead and we just didn't hold up to our end of the bargain. We were doing well in terms of garnering new work but not enough to keep the cash flow going. "
Owl and Mackerel had numerous projects in predevelopment, says Gower, but could not come up with the financing, which included internal cash flow, to move these properties forward.
Slaight confirms that delays, common throughout the television industry this spring, delayed Owl's production schedule and cash flow issues were one of the many problems the company encountered.
Sources outside Owl tv say the company underestimated how long it would take to put their aggressive business plan in place and did not have the production levels required to maintain the high infrastructure of the company.
Owl tv was currently in startup mode on two series, a difficult period for any company involved in tv production, and without advertising revenue from its magazines, the company's profit margin has always been slim. Slaight indicated earlier this year that Owl had become a $4-million-a-year business without a cash flow.
[printed in its entirety without permission]