In a bid to pay down its $1 billion debt, Hallmark Channel’s parent is selling domestic rights to its film library to Robert Halmi Sr.’s RHI Enterprises for $160 million, officials said Thursday.
The deal by Crown Media Holdings comes one day after the company named former Court TV chairman Henry Schleiff as its president and CEO.
In a press release, Crown described the library sale and Schleiff’s hiring as “the achievement of two critical objectives … allowing the company to move forward focusing its efforts on the profitability and continued growth of its channels.”
The sale includes all U.S. rights to more than 600 award-winning television movies, miniseries and series -- titles such as Moby Dick -- in the Crown library. RHI produces programming such as original movies and miniseries, for Hallmark and others.
Hallmark Cards, Crown’s major shareholder, originally purchased RHI from Robert Halmi Jr. and Robert Halmi Sr. in 1994, renaming it Hallmark Entertainment. But earlier this year, the Halmis bought back the production company from Hallmark Cards and changed its name back to RHI.
Crown said it will use proceeds from the library sale to reduce outstanding debt under its bank credit facility and for operating purposes.
While the deal price is $160 million, Crown nd Hallmark will reap additional financial benefits beyond that price tag, according to Robert Routh, a Jefferies & Co. analyst.
He pointed out that Crown will have the right to continue to broadcast select titles from the library on Hallmark Movie Channel for up to two years.
The international rights to the Crown library were sold in 2005 to a group of investors comprised of Providence Equity Partners, 3i and U.K. television executive David Elstein.
Crown expects to obtain approval and complete the transaction within six to eight weeks. Salem Partners acted as its financial advisor.