Posted by: Michelle Knoll | April 1, 2009

New Owner for Big Idea… Again…

Well, the news is out. 

I’ve been waiting for some time to see what was going to happen to one of my favorite animation companies, and it looks like the decision has been made.  Bob and Larry, hosts of the show “VeggieTales,” have a new owner.

Again.

I received an email alert about a news article that posted to Google News.  The article was from C21 Media, and it stated that Big Idea’s parent company was in “administration” and that subsidiaries (including Big Idea) had been sold.

I find it interesting who the subsidiaries were sold to.  For those of you who don’t know the history of Big Idea’s ownership, read on.

Anyone who knows anything about Big Idea knows that the company was created by Phil Vischer in 1993.  He built the company from a spare bedroom and a couple of friends helping him, to the largest animation company in the Midwest.

But after being in business for almost 10 years,  Big Idea was sued over a distribution agreement.  Since they were already having financial troubles at the time, the lawsuit compounded their financial woes.  To make a long story short, the only solution was to sell the company.  It was a very dark time for Bob and Larry and their vegetable friends.

They were bought by Classic Media in 2003, which was co-owned by Eric Ellenbogen and John Engelman.  Things for Big Idea went along pretty well, and then Mr. Ellenbogen and Mr. Engelman decided to sell Classic, and consequently Big Idea, to Entertainment Rights of London, in 2007. 

So Big Idea was sold. 

Again.

Well, things didn’t go very well for Entertainment Rights (also known as “ER”) after they bought Classic and Big Idea.  Their stock started to decline sometime after the acquisition, and late last year things turned really sour for the London-based media company.

So now… ER has been sold.  But guess who to?

Yep, that’s right.  Eric Ellenbogen and John Engelman.  So, they once again have control of Classic Media and Big Idea. 

But here’s some interesting info concerning things that happened along the way from letting go of Classic and Big Idea, to regaining Classic and Big Idea.

In 2007, very soon after Mr. Ellenbogen and Mr. Engelman sold Classic and Big Idea to ER, they became associated with a group called Spectrum Equity, and under the name “SP Classic Holdings, LLC” this group (including Ellenbogen and Engelman) purchased enough shares of ER’s stock to become the third largest shareholder in that company.

So, they didn’t own Classic and Big Idea any more… but they did… sort of… at least, in part…

(Having pertinent information concerning the financial health and welfare of ER at their fingertips was advantageous, I would suppose…)

Around the same time, they also created a firm called “Boomerang Media,” for the sole purpose of obtaining and managing entertainment copyrights and related intellectual properties.

ER’s stock really took a hit around the first of 2008, if my memory serves me correctly, due to poor sales at Christmastime, 2007.  However, very soon after that, Boomerang Media acquired funding from private equity firm GTCR Golder Rauner, LLC — funding to the tune of $200M — so they could continue their mission: to obtain and manage entertainment copyrights and related intellectual properties.

Sooooooo…..

Ellenbogen and Engelman let go of Classic and Big Idea in 2007, only to attach themselves to ER by becoming shareholders. And then, when things didn’t seem to be going very well for ER in 2008, Boomerang Media (Ellenbogen and Engelman) acquired a large amount of funding from a private equity firm.  Soon afterwards, the first news about “takeover talks” for ER came to light, actually in the same month.

And in all the lists of “potential buyers” for ER in the last 6 months, none of those lists mentioned Boomerang Media.

 

All I can say is, very shrewd, John and Eric.  Very shrewd, indeed.

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