Entertainment Rights is pinning its hopes on Filmation, the animated film archive containing the He-Man and She-Ra cartoon characters, to finally conquer the vast US market for children's television. The group, which is famous for Postman Pat, Basil Brush and Barbie, bought Filmation from Hallmark for $20 million (£11 million) in cash yesterday. "This deal is a door opener to America - that great, big, fat market which we love," said chief executive Mike Heap. "It is a market of 280 million people and over 40 million DVD players. If we sell to even just ten per cent of the market, that will mean multi-million pounds in sales for us. America is a major, major marketplace." With the advent of DVDs and the proliferation of children's channels globally, "this will be a great time to put He-Man and She-Ra back to the world", he added. Filmation has over 30 programme titles in its portfolio, including He-Man and Masters of the Universe, She-Ra, Ghost-busters, My Favourite Martian, Archie, The Lone Ranger, Fat Albert, Sabrina, and Bravestar. Following completion of the deal, Entertainment Rights will be launching an aggressive campaign to re-launch the programmes, putting them on videos and DVDs and on video games and other forms of merchandising. This will not involve heavy spending for the company, except for the additional overhead it has to spend to expand its team in New York. "We don't have to spend a huge amount of money. All we have to do is to decide how to package it. It's a very clean acquisition," Mr Heap said. The purchase of Filmation will make 2004 a "banner year" for the group, he said. "It will be earnings enhancing straight away but we will enjoy the full benefits of the deal in 2005-2006," he noted. Entertainment Rights could also finally fulfil its ambition to set up its own kids' channel, possibly next year, the chief executive said. Produced in the 1970s and 1980s, the Filmation library contains more than 500 hours of animation programming across over 30 programme titles Since 1982, it has generated more than $97 million (£53 million) in net revenue. The catalogue, which Entertainment Rights said had "not been proactively exploited during the last decade", nonetheless generated more than $44 million (£24 million) of net revenue in the past ten years and an average of $4.4 million (£2.4 million) of net revenue in the past three years. Entertainment Rights, which is valued at around £33 million, will fund the acquisition with a placing and open offer of new stock, underwritten by investment bank Collins Stewart at 1114p per share and raising £16.9 million. The group reported underlying pre-tax profits of £1.6 million for 2003. Turnover increased 22 per cent to £29.5 million, helped by the exploitation of its own children's characters, Mattel's Barbie and Hasbro's animated boys' action series Transformers. Mr Heap did not rule out further acquisitions. "We are looking at a range of opportunities," he said. The media company has already been successful in reviving wise-cracking puppet Basil Brush, whose "Boom! Boom!" catchphrase is as familiar to British children as it was to their parents. | 
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