http://query.nytimes.com/gst/fullpage.html?res=950DEED71038F932A35750C0A96F948260
October 2007
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THE MEDIA BUSINESS; Golan Quits Cannon Group To Form His
Own Company
By GERALDINE FABRIKANT
Menahem Golan, the former head of Cannon Group Inc., has resigned his remaining posts to form his own film production company, Cannon said yesterday.
Mr. Golan had been a director and senior executive vice president of Cannon and chairman and head of creative affairs at its entertainment subsidiary.
His departure marks the end of a reign over one of the more volatile small movie studios in Hollywood. An Aggressive Producer
Mr. Golan and his cousin, Yoram Globus, gained control of the Los Angeles-based film company in 1979. Cannon rose to prominence in the early 1980's, when it was aggressively producing films that were financed through pre-sales to foreign distributors.
Mr. Golan stepped down as head of Cannon last year when the company was in the midst of financial problems that stemmed from expanding too quickly and producing too many box-office failures. At that point, the Italian financier Giancarlo Parretti took control of the company.
Under a four-year agreement, Cannon said, it will provide $160 million for Mr. Golan's production company to produce 17 films, at an average cost of about $9 million a film.
In addition, Mr. Golan's company will receive $3 million a year for operating expenses and a $6 million fund for developing projects. Mr. Golan said Cannon would exercise administrative and creative control over all films produced by his company. Parretti's Empire
Mr. Golan will receive 20 percent of the net profits of each film his company makes, and he will buy the name and logotype of the 21st Century Distribution Corporation.
Mr. Parretti has been building his own film empire. Not only has he acquired Cannon Films, but last week he also bought New World Pictures through Pathe Entertainment Inc., a company that he controls. Both Cannon and New World were once major producers of independent films. New World also has a major television production operation. Like Cannon, New World was badly hurt by a string of failed productions.
''Parretti is spending a lot of money to get into the full-fledged production business,'' said Mark Manson, an analyst at the Donaldson, Lufkin & Jenrette Securities Corporation. ''If even half of what he says is so, he will become a major player.''
© 2007 The New York Times
http://query.nytimes.com/gst/fullpage.html?res=950DEED71038F932A35750C0A96F948260
October 2007
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