Media Headliner: Hallmark's supremo retreats to US to pursue family values

Robert Halmi Snr was put off bidding for ITV by its reality TV shows, Jeremy Lee writes.

It seems extraordinary now that just six months ago, Hallmark Entertainment, the majority owner of the Hallmark Channel and a subsidiary of the Hallmark Cards empire, was seriously considering making a bid for ITV.

According to the rumour mill, Hallmark had assembled a team of UK TV executives, thought to include the former chief executive of five, David Elstein, and his former sales chief and latterly the deputy chief executive of five, Nick Milligan, to spearhead the takeover.

How times have changed. Since then, the previously unforeseen favourable terms of the Carlton and Granada merger have led to a huge surge in ITV's share price, so predictions of an early sale have proved to be unrealistic.

Elsewhere, Milligan has landed a new job at the head of Sky Media, while Hallmark Entertainment itself has announced that it is putting its international TV business up for sale in order to focus on its US network.

The official line is that the company has "decided to explore strategic alternatives for its international business, including, but not necessarily limited to, a sale or other corporate transaction in an effort to maximise shareholder value".

While it is still too early for any of Hallmark's rival media companies to show their hands, few expect the "strategic alternative" to be other than a full-blown sale of its non-US TV channels and its considerable international programme library.

The man behind the decision to pull out of an ITV bid and then retrench back to the US is the 81- year-old chairman of Hallmark Entertainment, Robert Halmi Senior (who is also the father of the chairman of its subsidiary Crown Media, Robert A Halmi Junior).

Last month, just before picking up the lifetime achievement award at the annual MiP TV festival in Cannes, Halmi Senior explained his volte-face on the question of an ITV takeover. He said it was because ITV is too dependent on exploitative reality programming, in particular singling out I'm a Celebrity ... Get Me Out of Here!.

"Our shows ... don't take advantage and they don't have people eating worms," Halmi said.

The Hallmark Channel, available via cable and satellite in the UK, specialises in family friendly and rather more innocuous films and dramas such as Alice in Wonderland, Dinotopia and the multi-Emmy-winning Gulliver's Travels.

With no immediate synergies to be found and Halmi Senior's alternative solution of dumping all the popular but "junk" ITV shows for family friendly alternatives just too risky, he decided that this deal was not for Hallmark.

Halmi Senior would probably ban an adaptation of his own life story as too gritty for transmission on his channel. Nonetheless, it is a fascinating and heroic tale that embodies the American Dream. He was born in Hungary and was an active member of the anti-Nazi underground movement during the Second World War. Twice he was captured by the Germans and sentenced to death.

He fled in 1950 to the US where he worked as a photographer for Life magazine before getting a break in the TV industry working on ABC's American Sportsmen.

Halmi Senior progressed well and formed his own production company, RHI Entertainment. It was sold in 1994 to Hallmark Cards. The cards giant renamed the business Hallmark Entertainment and embarked on creating a branded TV network under the name Crown Media to showcase its library.

Crown Media is 75 per cent owned by Hallmark Entertainment giving the Hallmark Channel exclusive access to its library of more than 700 made-for-TV films.

Since its foundation, the TV network has expanded to 122 countries outside the US and has 111 million worldwide subscribers. In the UK, the operation has been going for four-and-a-half years and is run by the respected former chief executive of Granada Sky Broadcasting, Jeff Henry. It is ranked among the top ten multi-channel stations and has a growing share of audience.

So why the decision to withdraw to the States?

Well, there seems little chance of Halmi Senior opting to retire. He has personally produced more than 220 films and continues to have a hands-on role in the production business. Among this year's offerings are King Solomon's Mines and La Femme Musketeer.

The reason seems to be purely a commercial one. Hallmark relies on commissioning a large proportion of original movies and mini-series and spends $500 million per year on production, which is more money on programming than any other network of its size.

There is also the question of carriage deals - the company recently acknowledged that its international subscription rates would fall because of the increasing number of channels available to TV platform providers.

The US business is the strongest part of the Hallmark Channel's network.

Last year it increased its number of subscribers by 7.3 million to a total of 58.6 million and it is being bullish with advertisers in the upfronts in a bid to increase its share of revenue.

Certainly, its shows go down well with US advertisers. But the importance of family values is, for the time being at least, not of great concern to the less-prudish non-US audiences. Halmi Senior spotted this and is now free to complete his vision for American families.

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