Banff TV festival to take place despite financial troubles of organizing body

The Banff Television Festival "will absolutely" go ahead this year despite the red ink in which its not-for-profit parent is bathing. The Banff Television Foundation filed for bankruptcy protection on April 14 as part of a deal that includes new ownership by entertainment company Achilles Partners LLC, and that keeps the popular television festival alive. Under the plan filed with the court, Achilles Partners will run the upcoming 2004 festival with the understanding that it will probably lose $300,000 to $400,000 on the event. That loss could rise if delegate registrations, which this month stood at about 440 -150 shy of last year’s registrations at this point in the year - don’t improve. As part of the restructuring, high flying CEO Pat Ferns will resign to be replaced by Achilles principal Robert Montgomery. Ferns will remain with the foundation, based in Canmore AB, to focus on international development and content creation. The plan received the approval on April 14 of the Court of Queen’s Bench of Alberta. Finalization of the deal between Achilles and the foundation will likely be announced at an April 22 media conference in Toronto along the lines of those outlined in extensive court documents. "The deal is all negotiated. It is just pulling together final agreements and arguing over this word and that word so there is nothing substantive remaining. Robert Montgomery has been up in Canmore basically with his hands on the operations since last Thursday," J. Stephens Allan, representing the foundation’s bankruptcy trustee Richter, Allan and Taylor Inc., tells Canadian Communications Reports. "He’s really in place and is functioning as though a deal is done so it’s just a question of the paperwork getting caught up with the transaction." According to court documents, there were few viable alternatives to the Achilles agreement. Another Canadian investment group, after due diligence, concluded that the foundation’s assets had no real value and withdrew from negotiations. "There is no question that the Foundation is in perilous financial straits and it became our view that if Mr. Montgomery and Achilles were not prepared to conclude a transaction with the Foundation no other party could be enticed to consider a transaction with the Foundation," state the court documents filed by Richter, Allan and Taylor. "We also determined that the television industry participants, who are represented on the board of directors, were not prepared to make additional contributions to the Foundation. Each of the participants had already made their contributions, which are substantial, relative to the 2004 Festival." Founded in 1979 and governed by a 13-member volunteer board, The Banff Television Foundation’s raison d’être was to run the annual prestigious television industry event. Under the agreement, Achilles agrees to acquire the furniture, computer systems, inventories, and other foundation assets, along with the rights to acquire the licence to operate the foundation’s events for $100,000, according to the court documents. The tangible assets have an auction value of less than $25,000, as appraised by Century Services Inc. As well, it was agreed that delegate registration and sponsorship monies for this year’s TV festival would be segregated in a separate bank account and dedicated to staging the 2004 festival. Under the restructuring, the assets of the foundation will be transferred to a new foundation called the Banff Television Foundation (the New Foundation). Achilles will receive from the New Foundation cash of about $150,000 that will be used to mount the 2004 Banff TV festival. A nominee of Achilles, 1102146 Alberta Ltd., will acquire a licence for the rights to the festival from the New Foundation. Achilles will be responsible for any losses incurred for the 2004 festival. "In committing to stage the 2004 festival, Achilles will ensure that contributors of grants, delegate fees, advertising revenue, sponsorships and the like will be satisfied and will therefore not become creditors or claimants in the bankruptcy of the Foundation," state the court documents. Revenues received so far in support of the upcoming festival include: $173,000 in grants, $701,000 in regulatory benefits, $731,000 in delegate and other fees, $38,000 in advertising, and $396,000 in sponsorship for a total of just over $2 million. According to the trustee, the Foundation had a deficit of about $820,000 at Jan. 9, 2004. The list of secured and unsecured creditors is lengthy. They include Hotel Lutetia in Paris ($80,505), the Buffalo Mountain Lodge ($52,122), The Banff Centre ($49,104), Diners Club/enRoute ($17,129), SSK Conferences and Events Ltd. ($68,083), Amex Bank of Canada ($17,044.29), Joe Media ($53,500), Philippe Giroud ($74,213.70) and Jurys Doyle Hotels ($44,173.72). Accounts payable, other than essential payments such as rent, payroll and supplies, had been effectively frozen since the latter part of 2003. The bankruptcy trustee attributed the foundation’s bad financial state to a number of factors. The structural defects that were found within the organization include: excessive and costly office space; too large and well-paid a staff; board members that are scattered across the country, making it difficult and impractical for them to meet; a CEO that "is a talented and respected visionary in the industry but is not an effective manager;" and a relationship between the CEO and staff members that had deteriorated so much that the CEO no longer had their support. In terms of office space, the foundation rents stand-alone premises built in Canmore especially for it and rents additional facilities at a cost of about $250,000 per year. There are seven years remaining on the lease. The foundation staff consists of about 30 individuals. Banff had launched a number of other annual events to help cover overhead and utilize staff and other resources more effectively. But the trustee found that the "News World" event, which was introduced last year, turned out to be "a substantial failure," which added to the overall deficit and financial problems of the organization. As well, registration for the 2003 Banff Television Festival was hampered by the SARS outbreak, the Iraq war, and Mad Cow disease. "Revenues leading up to April 2003 appeared to be on a record pace, however, the organization failed to cut costs on a timely basis to react to a downturn in registrations as a result of these external forces. The 2003 festival, therefore, suffered a significant loss as opposed to a budgeted profit," state the court documents. The court documents also note, "There were numerous occasions during the course of negotiations where any hope of transaction between Achilles and the Foundation appeared to be doomed. This was primarily due to the serious financial condition of the Foundation and the limited opportunity to influence the 2004 festival (given the quick approach of the festival in June) to place it on an economically viable footing." The primary goal of the restructuring is to preserve the annual festival "for the sake of the Canadian television industry, to reduce the number of creditors who would be affected by the Foundation’s financial problems, to preserve jobs for the staff and to continue the economic and tourism benefits of having the festival held in Banff on an annual basis," the court documents state. The Banff Television Festival, which is celebrating its 25th anniversary this year, is scheduled for June 13-17. The keynote speaker is author and historian Michael Ignatieff who will discuss "Media Responsibilities in an Age of Terror," and will include sessions on "Does TV Reflect the Diversity of its Audience?", "Living Next to an Elephant," and Survival Strategies."

Banff TV festival to take place despite financial troubles of organizing body

News | 04/22/2004 4:00 am EDT

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