In one of its largest deals ever, Hallmark Cards Inc. has announced it will spend $365 million to acquire the leading independent producer of television movies and miniseries.
The Kansas City company has signed an agreement to acquire RHI Entertainment Inc., which has produced such notable programs as "The Yearling," "Lonesome Dove" and five "Hallmark Hall of Fame" specials.Analysts and Hallmark executives said the deal prepared Hallmark to move onto the so-called information highway being built by cable TV, telephone and other companies.
It could help transform Hallmark into a Walt Disney-like company producing a potent blend of media programming and consumer products.
"You have a proliferation of distribution highways," said Irvine O. Hockaday Jr., Hallmark's president and chief executive officer. "Inevitably, it seems to us that the exploding highway network will require more software."
Hockaday said moving to produce that software - in the form of TV programming - was one of the company's most important actions in his 10 years at the company.
"This sits most centrally in the crucible of our strategic vision of any of them," he said.
Expanding Hallmark's greeting-card business internationally also has been significant, he said.
Hallmark's purchase of RHI makes sense because the two have collaborated over the years, according to leaders in the television and cable industries.
"Given the long and happy relationship between them, such an acquisition is not a surprise," said Judd Parkin, ABC-TV's senior vice president for motion pictures for television and miniseries, in Los Angeles.
"It was a quiet deal, and we weren't aware of it until it was consummated," he said.
Hallmark and RHI have been co-producing movies for ABC.
With telephone, cable, direct broadcast and other companies preparing to funnel as many as 500 channels into the home soon, Hallmark and others see an opportunity to develop top-quality programming.
Hockaday would not speculate about what share of Hallmark's annual revenues, now about $3.4 billion, will be generated by greeting cards and by television programming 10 years from now.