You may not know the name Artisan Entertainment, but you certainly know the films Reservoir Dogs, Dirty Dancing, and The Blair Witch Project. Artisan Entertainment, the film studio and home video company that distributed these titles, mostly represented what seemed like a pile of debt and unprofitable video assets years earlier in the 1990s. No one would have guessed it would soon become the largest mini-major film studio in North America in the 2000s which is now incorporated into Lions Gate Entertainment.
Under the strategic direction of CEO Amir Malin during several key years which could have seen the company fail, the studio's success peaked in a merger between Artisan and Lionsgate that represented a 700% return for the investment company that took Artisan private in 1997. Returns like this don't happen overnight, and not without a lot of deft moves along the way.
Before spearheading the mission to save Artisan Entertainment, Amir Malin co-founded Cinecom Films in 1982 and sold it less than a decade later to SBK Entertainment. Subsequently, Malin was President of independent film distributor October Films and was responsible for product acquisition, distribution, and strategic initiatives until 1997.
As Mr. Malin was leading the negotiations to sell 51% of October Films to Universal's Motion Picture Group, Bain Capital recruited Malin to join the management team at Artisan. Few could imagine that this final effort to avert collapse would ultimately restructure the entire company, transform its finances, and upgrade its brand.
The early years
At this time in 1997, Artisan had already been through fifteen years of history and development since its conception. The company was initially formed in 1980 as Family Home Entertainment by Noel C. Bloom. Having begun his career in adult entertainment, Bloom was pivoting to children and family programming, most notably well-loved cartoons such as Gumby, and Care Bears.
Under Noel Bloom's NCB Entertainment Group and with various new distribution projects underway, FHE was incorporated into International Video Entertainment. Bloom left the company in 1987 and IVE and FHE consolidated into LIVE Entertainment which then expanded into other ventures including retail stores and a music label based along the East Coast.
LIVE Entertainment diversified into film production, notably financing Quentin Tarantino's Reservoir Dogs in 1992, and acquired Vestron, the company which had produced the successful independent film Dirty Dancing. Despite these accomplishments, by 1991 LIVE Entertainment was in debt and things were unraveling quickly. By 1994 two mergers had been scrapped and the studio was selling off video assets and equity shares in an effort to stabilize its financial position. New CEO Roger Burlage attempted to pivot from distribution to production but it became clear that the company needed new strategies and stronger leadership.
Artisan emerges
Bain Capital, a private investment firm based in Boston, acquired LIVE Entertainment and instated new executives to lead the company. Their approach to save LIVE was to restructure the company, using profits from the film library to invest in independent film production. They also rebranded as Artisan Entertainment to delineate its new endeavors from the studio's past, and start forging a new set of initiatives to redirect Artisan both creatively and financially. The focus would be on quality production and acquisitions.
With his professional experience in both business investment and content creation, Malin and the new executive leadership team were well positioned to revitalize the stumbling home video distributor and change its course. Their library of assets grew from 2,500 to 7,000 titles in new acquisitions, including well-known titles like It's A Wonderful Life, that represented and cemented their departure from mediocre to high-production value film assets.
On another front, Artisan expanded distribution into new markets like theatrical and pay-per-view television. With the success of these new advancements, Artisan was able to acquire and produce new content like commercially profitable independent horror film The Blair Witch Project.
This period of growth projected Artisan into the leading worldwide private independent film entertainment company, completely upending its financial performance. Revenue from 1997, the year of the Bain acquisition, to 2003, increased by almost 300% and ultimately led to a merger with Lions Gate Entertainment. Artisan was acquired for close to $400 million of enterprise value bringing to a historic close one of the greatest success stories in the film business.
This merger in December 2003, which brought a return of over 700% to the Bain Capital shareholder base, was led by Amir Malin, Artisan's President Ken Schapiro, and the senior management team. Malin is now the managing principal of Qualia Capital LLC, a media and entertainment investment firm, continuing his long and successful career in marketing, media distribution, content acquisition, and mergers and acquisitions. The success with Artisan represents a multi-faceted history in growing entertainment industry firms that has continued to this day.
Artisan's rise from an unprofitable and debt-ridden company of the early 1990s to its financial turnaround and growth into a major company, as well as notably having a hand in the early financing of Marvel films and other ventures, is a rare feat in the history of media firms. Artisan's incorporation into Lionsgate is a major milestone for mini-major film studios.
The success of the transformation of Artisan between 1997 and 2003 is a testament to the necessity of strategic business leadership for entertainment groups, focus on growth, and commitment to quality in media production.
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