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Liberty Livewire Corporation Business Information, Profile, and History

company todd services sound

520 Broadway
Santa Monica, California 90401
U.S.A.

Company Perspectives:

Livewire is the world's leading independent provider of technical and creative services to the entertainment industry. We provide audio and video post-production, transmission, library services, Internet Hosting, and audio-video distribution services via satellite and fiber for the major television producers, motion picture studios, cable and broadcast networks, advertising agencies, and other entertainment content companies. We also provide interactive television services. Our services integrate and apply a variety of systems and processes to enhance the creation and distribution of entertainment content.

History of Liberty Livewire Corporation

Liberty Livewire Corporation is the umbrella organization for a number of audio and video post-production companies operating in the United States and overseas. The company's major operating subsidiaries include Todd-AO Corporation, Soundelux, Four Media Company, and Video Services Corporation, each of which owns its own stable of post-production firms. Together, the major operating subsidiaries and a variety of smaller subsidiaries serve clients in the advertising, feature film, and television industries. On the audio side, Liberty Livewire's services include sound editing, soundtrack recording, and the mixing of dialogue, music, and sound effects. Video post-production services include visual effects and graphics, videotape editing, film-to-video transfer, and the mastering and duplication of videotape and DVD format. Liberty Livewire owns facilities in Los Angeles, New York, New Jersey, Atlanta, San Francisco, and Florida. Internationally, the company operates in Singapore, Madrid, Barcelona, and London. Liberty Media Group owns a controlling interest in Liberty Livewire. Liberty Media Group is in turn owned by AT&T Corp.

Origins

Liberty Livewire was formed in June 2000 by the combination of three prominent post-production companies. The mergers created what Variety, in an April 3, 2000 article, termed an "instant oligopoly" in the post-production business, a formidable new force comprising several of the most trusted and vaunted names in the industry. The corporate entity responsible for conducting the negotiations and orchestrating the transactions that ultimately led to the creation of Liberty Livewire was Liberty Media Corporation.

A wholly owned subsidiary of AT&T Corp., Liberty Media possessed financial stakes in a broad range of businesses, including cable, communications, technology, and Internet concerns. Its portfolio of cable channels included BET, Discovery Channel, Encore, QVC, E!, and USA Networks. Prior to its existence as an AT&T subsidiary, Liberty Media operated as a subsidiary of Tele-Communications Inc. (TCI), but when AT&T acquired TCI in 1999, ownership of Liberty Media passed to AT&T. As part of the AT&T and TCI merger, Liberty Media gained $5 billion in cash, the capital the company would use to develop a new, powerful post-production company named Liberty Livewire. Although there were three companies that formed the foundation of Liberty Livewire, the genesis of the company could be traced to one company in particular. Before the end of 1999, an agreement was reached to acquire Todd-AO Corporation, a celebrated audio and video post-production house whose formation in 1952 represented the origins of the Liberty Livewire organization.

In 1952, partners Mike Todd, George Skouras, and Dr. Brian O'Brien formed Todd-AO Corporation with the intent of revolutionizing the motion picture industry. Specifically, they planned to develop a new process in motion picture projection, a technology that resulted in a 70mm film format projected on a curved, wide screen with six-track stereo sound. Oklahoma! was the first feature film to use the new system, earning the 1955 Academy Award for Best Sound. The initial success of Todd-AO's six-channel theatrical sound induced the company to concentrate on recording sound services, which led to a string of awards for its efforts in audio innovation. Academy Awards were won by Todd-AO artists for Best Sound in a number of films during the 1950s and 1960s, including South Pacific, The Alamo, West Side Story, and The Sound of Music. The legacy of success established during the company's first two decades of innovation continued into the 1970s and 1980s, with Best Sound distinction awarded for Todd-AO's contributions to the making of Cabaret, The Exorcist, E.T.-The Extra-Terrestrial, and Out of Africa.

Todd-AO's efforts in the film industry were complemented by the company's involvement in the television industry. Todd-AO entered the business during television's early years, providing sound services for programs such as Burns and Allen and Mr. Ed. As the company's involvement in motion pictures intensified during the 1960s, so too did its participation in prime-time television programming. Todd-AO supplied sound services for programs such as The Beverly Hillbillies, Petticoat Junction, and Green Acres. Although the company figured as one of the pioneers in television sound on its own, its reputation in the industry was bolstered substantially after the 1986 acquisition of Glen Glenn Sound. Glen Glenn provided sound services for I Love Lucy beginning in 1951, a contract that cemented its reputation as a leader in sound post-production. Following the signal success with I Love Lucy, Glen Glenn provided sound services to a host of television programs, including The Dick Van Dyke Show, Gunsmoke, Bonanza, Mayberry RFD, Gomer Pyle, My Three Sons, Mission Impossible, Get Smart, and Wild, Wild West.

Further expansion through acquisition soon followed the purchase of Glen Glenn. In 1987, Todd-AO acquired New York-based TransAudio and renamed the asset Todd-AO Studios East, its addition marking the company's first move outside Hollywood. The following year Todd-AO added sound stages in Studio City, California, on property owned by CBS, and constructed a scoring stage in 1992. Annual revenue, which totaled $14 million the year Glen Glenn was acquired, grew substantially during the expansion period. By 1994, Todd-AO was generating more than $32 million in revenue, and set to record more robust growth in the coming years.

Salah M. Hassanein, a Todd-AO director since 1962, was named president in 1994 and began implementing an ambitious expansion program. Hassanein intended to diversify the company's post-production services and to greatly extend its geographic reach, hoping to lessen Todd-AO's vulnerability to film production cycles. As a result, the company entered the video services business in 1994 via acquisition, renaming the acquired property Todd-AO Video Services. The following year, the company completed its first move overseas, acquiring the production unit of London-based Chrysalis. In 1996, Todd-AO acquired another London-based post-production company named Filmatic. Together, the two acquisitions extended Todd-AO's video services capabilities into the European market. Also in 1996, the company acquired Editworks, which established a video services presence in Atlanta and moved the company into the commercial and advertising market.

The Union of Todd-AO, Soundelux, and 4MC in 2000

In the years leading up to the merger between TCI and AT&T, Hassanein spearheaded robust growth. By 1999, when AT&T acquired TCI, Todd-AO was generating more than $118 million in sales, nearly twice the amount recorded three years earlier and roughly four times the sales volume registered when Hassanein took command in 1994. It was at this juncture in Todd-AO's development that Liberty Media began cobbling together the companies that would lead the cable and communications conglomerate into the post-production business. At the heart of the new company created by Liberty Media were Todd-AO and two other post-production concerns, Four Media Company (4MC) and Soundelux. Created in June 2000, the new company, named Liberty Livewire, represented a $420 million investment, yielding a corporate entity with a broad reach into the spectrum of post-production services, including sound editing and mixing, film editing, film transfers, special effects, and DVD authoring.

The addition of 4MC and Soundelux to the capabilities possessed by Todd-AO created a well-rounded foundation for the newly formed Liberty Livewire. Established in 1993, 4MC devoted itself to investment in new digital systems and equipment during the seven-year period leading up to its inclusion underneath the Liberty Livewire fold. The company provided feature film and commercial post-production services, serving the motion picture, television production, and multimedia industries. Its facilities were located in Los Angeles, San Francisco, Singapore, and London. Soundelux was founded in 1982 by Wylie Stateman and Lon Bender, two veteran sound editors with numerous awards to their names. As a supervising sound editor, Stateman earned Academy Award nominations for True Lies, Born on the Fourth of July, and Cliffhanger, as well as a British Academy Award for JFK, among other nominations and awards. Bender established his name in sound design with his contributions to the film Coal Miner's Daughter, which was nominated for an Academy Award for Best Sound. Bender earned a host of nominations and awards for his work in sound design following Coal Miner's Daughter, including the 1995 Academy Award, British Academy Award, and Golden Reel Award for his work in Braveheart.

Todd-AO, 4MC, and Soundelux, each operating under the auspices of Liberty Livewire, fell under the control of two TCI veterans. David P. Beddow was selected as Liberty Livewire's chief executive officer upon the company's formation in June 2000. Formerly an executive vice-president of TCI Communications, Inc.—the U.S. cable subsidiary of TCI—Beddow was joined by another TCI executive, William R. Fitzgerald, who was elected Liberty Livewire's chairman of the board in August 2000. Fitzgerald was a former executive vice-president and chief operating officer of TCI. In day-to-day command over Liberty Livewire, Beddow presided over three former rivals whose union under the Liberty Livewire umbrella presumed less competition among Todd-AO, 4MC, and Soundelux, and consequently more clients and increased revenues for the three companies. Beddow, in an April 3, 2000 interview with Variety, remarked, "When you put all of these companies together, you can get a much better utilization of personnel and facilities, enabling you to improve [profit] margins in that respect."

Expansion in 2000 Creates Post-Production Conglomerate

The three companies that formed Liberty Livewire's core were soon joined by other post-production firms. Fitzgerald and Beddow had only taken their first steps down what promised to be a lengthy acquisition trail. On June 21, 2000, the company announced it had agreed to acquire privately held Triumph Communications Group from its founder, Paul Dujardin, in a $29.4 million deal. The acquisition gave Liberty Livewire a toehold in the area of broadcast transmission services. Triumph Communications designed and implemented video transmission services for a variety of clients, including broadcasters, cable networks, news, sports, infomercials, and corporate organizations.

The Triumph Communications acquisition was followed by two separate acquisitions that added substantially to Liberty Livewire's post-production capabilities, both domestically and abroad. The smaller of the two acquisitions was completed under the aegis of 4MC, which paid an estimated $25 million for U.K.-based Soho Group Ltd. The deal included the purchase of real estate in London's Soho area and control over three London-based companies that primarily served the advertising industry. Specifically, the acquisition gave Liberty Livewire ownership of a film lab named Soho Images, a commercial editing shop named Soho 601, and a 50 percent stake in Soho Computamatch, which provided negative cutting services employing proprietary computerized technology. At roughly the same time, Liberty Livewire acquired Northvale, New Jersey-based Video Services Corporation (VSC), the parent company for eight operating subsidiaries in New York, New Jersey, Florida, and California. The $125 million acquisition represented a significant addition to Liberty Livewire's ever growing portfolio of post-production assets. In an August 2000 article in SHOOT, Beddow explained that VSC's "fiber and satellite transmission network in the New York and Washington areas is particularly noteworthy." He continued, "Along with the recent acquisition of Triumph Communications, and 4MC's Burbank and Singapore facilities and Todd-AO's London Broadcast Operations Center, VSC's addition will put Livewire in the forefront in the delivery of broadcast transmission services."

By the time Liberty Livewire celebrated the end of its first year of business, the company had acquired ten media companies. The company had attracted considerable attention within the entertainment industry for its aggressive, acquisitive activities, but the reaction from Wall Street was less than positive. Liberty Livewire's stock began trading at $48 per share and within several weeks rose to a record high of $74.69 per share. By the time the company was celebrating the completion of its first year of business, however, its share price had plummeted, dropping 91 percent in value. Two senior executives left the company during the downward spiral, including Beddow, whose departure in April 2001 left Liberty Livewire without a chief executive officer. Fitzgerald offered his explanation for the tepid response among analysts and investors. In a June 4, 2001 interview with the Los Angeles Business Journal, he said, "It's probably because Liberty Livewire is not well understood. We haven't gone a huge distance in telling the story. We decided to walk before we run with our assets and get our ducks in a row on the operating side before getting out and publicly telling the story." Robert T. Walston, chairman and chief executive officer of 4MC before its acquisition by Liberty Livewire, was selected to replace Beddow. To Walston fell the task of continuing Liberty Livewire's development into a post-production conglomerate without parallel.

Principal Subsidiaries: A.F. Associates Inc.; Asia Broadcast Centre; Atlantic Satellite Communication Inc.; Audio Plus Video International Inc.; Audio Plus Video West; Company 3; Digital Image; Editworks; Encore Video; Filmcore; 525 Studios; Four Media Company; Four Media U.K.; Group W Network Services; Hollywood Digital; Level 3 Post; Manhattan Transfer/Edit Inc.; Manhattan Transfer Miami; Method; POP Cinrama DVD; POP Sound; POP Studios; Riot; Rushes; Soho Group; Soundelux; Sound One; SVC; Tele-Cine Ltd.; Todd-AO Corporation; Triumph Communications; Video Services Corporation; Virgin TV; Waterfront Comm. Corp.; West 1 Television.

Principal Competitors: Laser-Pacific Media Corporation; Point.360; Digital Generation Systems, Inc.; Lucas Digital Ltd. LLC.

Chronology

  • Key Dates:
  • 1952: Todd-AO Corporation is formed.
  • 1955: Oklahoma! is the first feature film to use the company's new sound technology, earning that year's Academy Award for Best Sound.
  • 1986: Company acquires Glen Glenn Sound.
  • 1987: Todd-AO moves beyond Hollywood by acquiring New York-based TransAudio.
  • 2000: Liberty Livewire is formed in June; Soundelux and Triumph Communications are acquired in July; Soho Group Limited is acquired in August; Liberty Livewire gains control of Video Services Corporation in December.
  • 2001: Group W Network Services is acquired.
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