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Thursday, Mar 28, 2024

Minority Investors in Love-Hate Relationship

Minority investors in Crown Media Holdings Inc. once again are raising questions about the company’s future and whether it should be sold off to a larger media corporation. Crown Media, the Studio City-based owner and operator of Hallmark Channel and Hallmark Movie Channel, is controlled by Hallmark Cards Inc. of Kansas City, Mo., and a Hallmark subsidiary. Minority investors hold less than 10 percent of the shares. While those investors have been pleased with Crown’s financial performance, they still question whether Crown should remain independent. “I would like to see them do the right thing,” said Sal Muoio, who holds Crown shares through his New York investment firm, S. Muoio & Co. “It does not make sense to be a stand alone company.” Muoio said being part of a larger media entity would benefit Crown, as it could reduce overhead and have better negotiating leverage for distribution. Negotiating power was also on the mind of Spencer Grimes, managing partner with Twinleaf Management LLC in New Canaan, Conn. He sent a letter last month to Crown’s directors. The letter argued that consolidation in the cable TV market means distributors can negotiate better terms from programming networks such as Crown Media. “Without a stable of sister networks and a well-connected parent company, the Hallmark channels lack the negotiating clout necessary to effectively compete for license fees from bulked-up distributors,” Grimes said in the letter. The Crown board never responded to Grimes’ letter or to a letter sent early in the year from another investor, Lawrence Stern, in New York, advocating a sale. The Hallmark Channel began broadcasting under that name in 2001, with the Hallmark Movie Channel following in 2004. Hallmark Channel airs original movies, sitcom and drama re-runs and, starting in 2013, original scripted series. This fall the Hallmark Movie Channel is being re-branded as Hallmark Movies & Mysteries. Muoio began investing in Crown Media in 2006. While pleased with financial performance – Crown has grown its earnings before interest, taxes and depreciation every year since 2008 – it is the majority owners who are “the fly in the ointment,” Muoio said. That said, Muoio added he is not insisting the Crown board take any action and that being patient is sometimes the best strategy. “Someday they will find the right home for this asset and do the right thing for the minority shareholders rather than taking it private,” he said. Festival for Fun Now in its 14th year in Los Angeles, the International Pop Overthrow music festival continues to match the vision of its founder, David Bash, of presenting independent bands he loves without having to deal with big egos. The Sherman Oaks resident admits that if he were a better businessman, his festival would be larger and more well-known. A hard-edged businessperson could recommend changes on how the festivals are run, but that wouldn’t be him. “Everyone has to do the thing that is suited to their personality,” said Bash, 55. “Thankfully I have been able to keep IPO surviving in a climate where even surviving is something to be proud of.” The festival is presented at five venues over 10 days starting July 25, including Skinny’s Lounge in North Hollywood. It’s one of 10 festivals that Bash is scheduled to put on this year in North America and England. While the shows in Liverpool, England attract the most international bands, Los Angeles is the festival with the most sentimental value because it is where Bash started in 1998. “Los Angeles has the most thriving music scene when compared with other cities,” he said. Bash, a former teacher who also writes for music magazines and CD liner notes, now makes the festival his full-time job. The event make him money through a combination of venue cover charges, sponsorships from record labels and other music-related business, and payments from bands to be included on the annual 3-CD compilation set. “I am not rich. But fortunately as far as the festival is concerned, I don’t have huge expenses,” said Bash, who is assisted by girlfriend Rina Bardfield and volunteers in the cities where the festival takes place. Movie Placements Movie audiences got a taste of what music publisher and production library Black Toast Music has to offer after getting songs placed in three summer films. The hit comedy “Neighbors” featured three songs from Black Toast: G-$tack’s “Army Of One,” St. John’s “Get Your Party On,” and R&B artist Renald Francoeur’s “Give Me Everything.” “This Is Who I Am,” featuring Shelayne, was featured in the opening title sequence of “Begin Again,” which opened on July 4. Sports drama “When the Game Stands Tall,” opening Aug. 22, features five marching band tracks supplied by Black Toast, which is in Chatsworth. “While we are well-known for having years of success in placing new music within network broadcast and cable television series, we are thrilled to continue to expand our music outreach into the world of major motion pictures,” Black Toast Chief Executive Bob Mair said in a prepared statement. Staff Reporter Mark R. Madler can be reached at (818) 316-3126 or [email protected].

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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