Norman Lear Selected Press
Coke buys Embassy: 485 million
Deal gives Coca-Cola extensive library of previously existing,
current TV shows
By CHRISTOPHER VAUGHN
and BILL DESOWITZ
The Hollywood Reporter, 6/18/1985
NEW YORK — Following days of reports and speculation surrounding a potential buyout of Embassy Communications, Coca-Cola’s Francis Vincent, president of the entertainment business sector, has confirmed his company’s purchase of both Embassy Communications and Tandem Prods. for a total price of $485 million.
The deal automatically gives Coke a substantial library of existing network TV programming, including the current series “Diff’rent Strokes”, “Facts of Life,” “Silver Spoons”, and “Who’s the Boss?,” in addition to the upcoming fall comedy series “227” and the miniseries “Kane and Abel.”
Both Embassy and Tandem are privately owned by Norman Lear and Jerry Perenchio. The two, along with others who hold interest in the company’s three loosely held divisions (pictures, television and home entertainment) will divide about $195 million cash (less debt) with the balance offered in the form of Coca-Cola common stock. Coke closed yesterday on Wall Street at $68.87 per share.
Coke says it is planning “certain restructuring activities” concerning the agreement, and its net investment in the businesses acquired will be reduced to about $130 million. That restructuring will include the sale of Embassy’s home entertainment operation, said to be valued at around $80 million and possibly the pictures arm. The acquisition is expected to close within 60 days.
Although the Coke statement says Embassy TV will continue to operate as a separate production company, it is not certain if that policy will continue forever.
Ray Boyce, a spokesman for Coca‑Cola, quoted Vincent as saying: “The acquisition is a Coca-Cola Co. acquisition and the purchased units, which are films, home entertainment and television, are being placed under the entertainment sector of Coca-Cola, which is headed by Frank Biondi. It is independent of Columbia Pictures. Embassy Film Associates is not part of the deal. Coke hopes the current Embassy management will stay on.”
It has previously been reported (HR 6/7) that one of the reasons for Coke’s interest in Embassy is Biondi’s propensity for deal-making.
Embassy’s television arm has been the premiere supplier of network comedy programming for more than a decade, with hits that include “Maude,” “Archie Bunker’s Place,” “The Jeffersons,” and “Good Times”.
Tandem, which was formerly the partnership of Lear and Bud Yorkin before being bought out by the Lear/ Perenchio duo, is managed by Embassy TV and has offered “All in the Family,” “Sanford and Son” and “Diff’rent Strokes,” among other shows.
The company changed the face of television, offering such ground-breakers as the first interracial marriage on a comedy in “The Jeffersons”; the first prime-time abortion discussed on “Maude,” and the weekly stab at bigotry via “All in the Family”
Embassy Telecommunications handles the distribution of the series, and has scored record deals for such efforts as “Facts of Life” and “Diff’rent Strokes,” the leading new off-network series in the Cassandra Nielsens.
Speculation persists, meanwhile, regarding the potential move of Embassy chairman and CEO Alan Horn to Columbia as president (filling Guy McElwaine’s previous slot). The Embassy source denies that such a move will occur: “As of this time, Alan Horn has no plans.” Horn could not be reached for comment. A Columbia source also denied the reports.
At least one outside source familiar with Embassy, however, believes the speculation is not farfetched: “I think it’s a logical move for Horn,” the source said.
Although Embassy’s Perenchio could not be reached for comment, Lear issued the following statement regarding his future: “It was the right people with the right offer at the right time in my life. I am eager to get back to basics — to write and direct again — so I welcome the curtain going up on act three; act two was terrific.”
In assessing the buyout from Embassy’s point of view, one inside source, who asked not to be identified, said it is difficult to read between the lines until Coca-Cola completes the transition.
“For the next couple of months, we suspect it will be business as usual for Embassy until they decide what to do,” the source explained. “Obviously Embassy TV will function longer intact than the film division, since Coca-Cola plans to have it operate as a separate company.”
It has previously been reported (HR 6/12) that Coca-Cola would use Embassy Television and spin off Embassy Home Entertainment and Pictures. Coca-Cola’s announcement confirms this plan, even though no mention is made regarding Embassy Pictures, according to one inside source.
“The key points are that Embassy Television is going to operate as a separate production company, Embassy Home Entertainment is going to be disposed of and Coca-Cola is reducing its net to approximately $130 million,” the source said, “It seems to me that Coca-Cola is going to have to sell off Embassy Pictures as well.”
The future of Embassy Pictures, therefore, remains uncertain. Rob Reiner’s “The Body” began production yesterday in Oregon, and four other projects await release dates. They include “The Goodbye People,” tentatively scheduled for a late summer or early fall run in New York; “Saving Grace,” currently in post-production; “Broken Hearts and Noses,” which is being tested, and “A Chorus Line,” scheduled for a Christmas release..
The only certainty is that “The Emerald Forest” will be distributed by Embassy July 3.
Martin Shafer, Embassy Pictures president, reiterated his own business as-usual stance yesterday.
“I don’t know what they’re going to do about film,” Shafer said “I haven’t spoken to anyone about it. I am as anxious as anyone to find out what they’re going to do about us.”