EDMONTON – The Court of Queen's Bench of Alberta today granted Allarco Entertainment 2008 Inc. and Allarco Entertainment Limited Partnership (which does business as Super Channel) protection from its creditors under the Companies' Creditors Arrangement Act (CCAA).
The initial period is for 30 days, to expire on June 25, 2016, subject to extensions, if granted by the Court. According to court documents, the company owes $115.7 million to various creditors, including the likes of Twentieth Century Fox, Starz and Warner Bros. for content airing on the pay TV service.
The company, which operates as the Super Channel TV brand in Canada, said in a press release it opted for CCAA again (it went through this process in 2009, emerging in 2010) “after consideration of all available alternatives,” and that it will continue to operate while it restructures and refinances, supervised by the Court appointed monitor PricewaterhouseCoopers. The Monitor will oversee Allarco's ongoing operations, liaise with creditors and other stakeholders, and assist with the development and filing of a formal plan of arrangement or compromise and attend to all Court reporting pursuant to the CCAA.
In its court filing, the company paid blame for this recent filing at the feet of many things changing in the media world, from cord-shaving and cutting and cord-nevers, the fact that Rogers, Shaw and Bell have launched streaming services shomi and CraveTV, a shrinking overall pay-TV subscriber base, the availability of various apps for viewing content (Super Channel has none), and "the bundling of channels which the larger industry participants such as Rogers and Shaw can offer their customers for a similar price to the Super Channel service, results in fewer customers being prepared to subscribe to the Super Channel service," reads the court documents.
So, the company plans to do a couple of things to survive. While it has already cut staff by 30% (to down under 30 employees now) while suffering a 20% year-over-year decline in subscription revenue, it also plans to re-price its service down from the $15 to $20 a month it can be found now at retail to $10/month "which is more competitive with competing services such as Netflix, Shomi and CraveTV", reads the filing. "The company believes it can regain lost subscribers at this price point."
As well, it has hired Marckenz Group Capital partners to try and dig up additional investors or attempt to sell Super Channel altogether, but in the meantime, has plans to develop better consumer marketing on the web and through social media, change its programming lineup, and develop an authenticated streaming portal.
More to come on this story as it makes available its list of secured and unsecured creditors. The court documents can be found here.
