Canadian distributor eOne eyeing Alliance Films takeover

eOne, Alliance Films

The past few years have seen the Canadian film distributor market shrink quite noticeably, with larger companies such as Alliance Films and eOne gobbling up smaller competitors like Maple and Seville Pictures. Now that market seems poised to shrink even more with news that Toronto-based eOne is contemplating a takeover of Montreal-based Alliance Films, whose owners -- Goldman Sachs -- put it up for sale in January. Nothing is official yet, but the ball is now in motion to create a behemoth film distributor that would likely be Canadian in name only.

The rival studios are two of Canada's largest distributors and were both originally founded by Canadians. EOne is now owned by a British investment group, but Alliance Films -- once part of the now-divided Alliance-Atlantis media empire -- is still partly owned by the government of Quebec. Any takeover would likely put the combined entity firmly in the hands of foreign investors, ending years of strong "Made in Canada" production and distribution by Alliance.

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EOne started as a music distributor in Toronto in 1973 and steadily grew to become one of Canada's largest media distribution companies. In 2007, the company was bought by U.K.-based Marwyn Investment Management and ceased to be a Canadian company. EOne is now probably best known to Canadians as the distributor of the highly successful "Twilight Saga" movies.

The takeover of Alliance Films would truly be an end of an era for the vaunted Canadian company. Founded in 1984 by a group of Canuck power producers, the company became Canada's premiere film distributor and producer. Alliance distributed notable movies such as Quentin Tarantino's "Reservoir Dogs" and Kevin Smith's "Clerks," and co-produced David Cronenberg's award-winning "Crash."

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The film division of the company was relaunched after the breakup of Alliance-Atlantis. It produced the Canadian war drama "Passchendaele" and co-produced the Jennifer Aniston/Paul Rudd comedy "Wanderlust" as well as the horror film "Insidious" from the creators of the "Saw" movies. All major flicks with a Canadian touch.

The Société générale de financement, Quebec's investment agency, still owns a huge chunk of Alliance Films and would likely have to agree to any takeover. But because Goldman Sachs put up the company for sale, the Canadian investment group would likely have little say in the matter. Quebecers might take exception to the takeover, however. The Vivafilm arm of the company is a major distributor and producer of Quebecois films in la belle province, so the preservation of French-Canadian film culture would definitely be an issue in the deal.

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That said, any takeover of Alliance would have far-reaching effects outside Quebec. The conglomeration of the major Canadian film distributors would have a definite effect on the movies Canadian filmmakers are able to produce -- and the movies Canadian audiences would be able to watch. It's already difficult to find good Canadian content in movie theatres across the country. What happens when a foreign-owned company formerly made up of Canadian distributors decides that Can-con is no longer commercially viable? It just might happen if eOne's takeover of Alliance Films goes forward.

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