Forwarded by Susan Bunting

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                               Los Angeles Times

                    September 18, 1994, Sunday, Home Edition

SECTION: Business; Part D; Page 1; Column 3; Financial Desk

LENGTH: 1565 words






   The cast of the new CBS action-comedy series "Due South" perches
precariously in a canoe floating, incongruously, in a set built to
represent a Chicago sewer tunnel.

   Series co-star Paul Gross and guest star Leslie Nielsen are suited
up in the red-jacketed ceremonial uniform of the Royal Canadian
Mounted Police. The other series co-star, David Marciano, sits in mid-
canoe, playing a brash, sarcastic Chicago cop.

   In the rapid-pace dialogue of the scene, Marciano's character
worries about rats in the water, while Gross' frets about scuffing
the borrowed boat on the sewer wall.

   Here, in 15 seconds, is the central joke in "Due South" -- the
cultural collision of the naive, ramrod-straight Mountie from the Far
North with the gritty American urban-scape.

   "Due South" was cooked up by former CBS Entertainment President
Jeff Sagansky and Robert Lantos, chairman of Canada's largest film
production and distribution company, Alliance Communications.

   The program is a landmark here, not only for Alliance, but also
for the entire Canadian film industry. When "Due South" debuts
Thursday it will be the first Canadian-produced series to appear on
an American network in prime time.

   "Selling a prime-time television series to a U.S. network has
pretty well been the exclusive domain of a relatively small number of
companies, all of which are Los Angeles-based," Lantos said in a
recent interview. "Reaching that point (for Alliance) . . . was
something that has been under way a long time."

   But it is only part of a rising American profile for Alliance, a
Toronto-based diversified entertainment company founded by Lantos in

   The company, which went public a year ago, has three more series
and 10 movies-of-the-week in development or production at American
networks and cable channels, said Michael Weisbarth, senior vice
president for television at the company's Beverly Hills office.
(Alliance also has offices in Montreal, Vancouver, Paris and Shannon,

   The company just wrapped up four television movies based on the
mega-selling Harlequin romance novels published by Toronto-based
Torstar Corp., which CBS will counter-program to Fox's Sunday NFL
broadcasts this fall.

   Alliance has an exclusive arrangement with Torstar and envisions a
string of Harlequin films, eventually repackaged as videos that can
be sold next to the books at retailers across North America.

   Alliance Releasing, headed by longtime Lantos business associate
Victor Loewy, is the leading Canadian-owned film distributor here. It
recently cut a deal to distribute Miramax films in Canada, giving
it Canadian rights to Robert Altman's upcoming "Pret-a-porter" and
Quentin Tarantino's "Pulp Fiction," among many others.

   In February, the company and Miramax will release the Alliance-
produced "Exotica," written and directed by Atom Egoyan. The film,
typical of the low-budget, director-driven projects the company long
has been associated with, made a splash at this year's Cannes Film
Festival, winning the International Critics Prize. Another Alliance
production, "Whale Music," opened the Toronto International Film
Festival on Sept. 8.

   "Johnny Mnemonic," a futuristic adventure based on a novel by
cyber-fiction  author William Gibson, is in post-production, and at
$23.4 million is the most  expensive Canadian movie ever made.
"Johnny Mnemonic" stars Keanu Reeves and is a co-production with

   The company recently launched a new division to produce low-cost
action movies mainly for the cable and video market and in January
will go on the air with its own cable channel on Canadian
television, Showcase.

   "It's very informal, very high energy, very demanding and very
exciting," chief operating officer Gord Haines said of the company he
joined two years ago. "It's like being in the middle of an

   About the only thing that hasn't exploded is the stock price,
which has only recently begun to rise after months of staying close
to the $13 a share sold at offering. Alliance stock closed down 12.5
Friday at $15.625 on the Toronto Stock Exchange. Revenue was up 45%
for the year ended March 31, with after- tax profits of $5.36 million
on revenue of $79.56 million.

   Roger Dent of the brokerage firm Wood Gundy Inc., one of the few
analysts who focus on entertainment companies here, is very high on
Alliance and attributes the slow rise in the stock price to cautious
Canadian investors unfamiliar with the industry.

   Alliance is very much the creation of the Hungarian-born Lantos,
45, described by "Due South" executive producer Paul Haggis as "a
real character, a larger-than-life producer."

   Lantos, the company's largest shareholder with a 21% stake, began
in the early 1970s as a distributor and independent producer. Working
in a Canadian environment dominated by the major American studios,
Lantos has prospered by pursuing projects eschewed by the studios, by
perfecting the art of international financing -- mainly through pre-
sales to foreign markets -- and by building a lattice work of
mutually supportive divisions within Alliance.

   For example, Alliance's distribution rights to movies from Miramax
and New Line Cinema and to popular European films give it the clout
with exhibitors to assure screen time for its own productions. Other
Canadian film producers have a notoriously difficult time getting
exhibitors to show their movies rather than American films.

   One company division, Alliance Equicap, specializes in arranging
production financing to take advantage of subsidies and tax breaks
offered by many countries for films and television meeting national
content rules. A movie featuring a Canadian writer and producer and a
French director and star might qualify for subsidies and tax breaks
in both countries, for example.

   This approach has been crucial to Alliance, and allows the company
to take on a personal film like "Exotica," which Egoyan describes as
a "perversely romantic" movie he made for less than $1.5 million.
With its success at Cannes, the film is pre-sold to a variety of
markets and is profitable before its release.

   "The relationship has been very important to me," said Egoyan, who
has made two films with Alliance. "They've given me access to a
higher budget than I was used to and a lot of freedom. And they're
very adept at selling the films."

   In producing "Exotica" and similar "art films," Alliance keeps a
firm grip on the budget, generally less than $3 million, and only
steps into the creative process more or less when asked.

   "There's no point in backing someone with an eccentric vision and
then trying to interfere with that vision," Lantos said in explaining
his philosophy. " I don't believe we have ever lost money on one of
those director-driven low-budget films. . . . We only finance them in
part and our investment is on a favorable basis, but we've never lost

   With "Johnny Mnemonic" and others, Alliance is stepping into a
different arena, but Lantos argues that the company's approach is

   "None of these films is what you would call a mainstream Hollywood
movie, including 'Johnny Mnemonic,' " he said. But "at that level
financially, production makes no sense unless there is a significant
guaranteed revenue coming out of the United States. So we work with
the U.S. distributors as partners on the more ambitious films, but
still we pick the projects that are out of the norm."

   Egoyan observed that "what's ultimately interesting about Alliance
is that it's able to embrace contradictions. They're able to pursue a
number of different types of projects and give equal attention. I've
never felt I've been less important to the company than their
television work, and yet I know television is the financial fuel for
the company."

   If Alliance made its way into the film world by backing eccentric
little visionary films, it took quite a different road to success in

   The company entered American television with such late-night
fodder as "Night Heat," a CBS action-adventure series. (To be fair,
Alliance also has long produced critically  acclaimed  series for
Canadian  television. ) And Lantos said the hands-off attitude he
takes with the director-driven films is the "exact opposite" of his
approach to television.

   Alliance built its credibility with the networks with successful
movies-of-the-week and miniseries.

   Beverly Hills-based Weisbarth points to the ratings-successful
"Family of Strangers," starring Patty Duke and Melissa Gilbert, as an
example. The film, about an adopted woman searching for her birth
mother, was based on a true story, but Alliance moved the action from
Indiana to the Northwest and filmed in Vancouver. Canadians wrote and
directed and Canadian William Shatner co-starred with Americans
Gilbert and Duke.

   With "Due South," Alliance has penetrated what Lantos referred to
as the innermost concentric circle of the television business, the
prime-time series.

   Whether the show sticks can't be foretold. But both Lantos and
Weisbarth say even a quick cancellation would not be fatal to
Alliance's future with the U.S. networks. There are already too many
other projects under way.

   "If it does get  canceled,  it would be a disappointment, but not
a setback. It's maybe two steps forward and one-half step back,"
Weisbarth said.

GRAPHIC: Photo, COLOR, Actors Leslie Nielsen, left, Paul Gross and
David Marciano in "Due South," a Canadian-produced comedy that debuts
Thursday on CBS, contrasting a crisp, naive Mountie and a rumpled,
wise-cracking Chicago cop. ;
Photo, Hungarian-born Robert Lantos, left, and associate Victor Loewy
have succeeded in entering the U.S. film and TV markets from Canada.

.   Content recedes as technique flourishes       Allan Liska        .
.   and reflection disappears.  This may be    Dept. of Sociology    .
.   the defining feature of what is called   University of Maryland  .
.   postmodernity. --Herbert Schiller          HSTAUB@BSS1.UMD.EDU   .
.               --FREEDOM NOW: FOR LEONARD PELTIER!!!--              .