Crown Media, Hallmark agree to deal

KANSAS CITY, Mo. (AP) -- A subsidiary of Hallmark Cards Inc. that runs the cable TV Hallmark Channel has agreed to produce a number of television shows, specials and movies to avoid a lawsuit from a religious coalition.
Crown Media Holdings Inc., based in Studio City, Calif., said the National Interfaith Cable Coalition Inc. threatened to sue, saying the company and its parent, Hallmark Entertainment LLC, had breached a 2001 agreement to produce and finance the coalition's programming.
The coalition, a television programming consortium that includes the National Council of Churches and 70 other Christian and Jewish organizations, estimated it has suffered more than $100 million in losses. The coalition holds a 6.1 percent interest in the company.
Under the new agreement, reached on Dec. 1, Crown Media will continue to produce and broadcast a number of coalition-backed programming on Sundays through 2007, as well as produce four television specials and pay the coalition to develop made-for-television movies during that period. In total, Crown Media estimates the programming and development will cost more than $45 million.
Hallmark Cards, a privately held company based in Kansas City, has agreed to pay $3 million toward the settlement.
Last week, Hallmark said it had sold Hallmark Entertainment to that company's management and is looking for a buyer of Crown Media.
The agreement said that if Crown Media is sold by June, the coalition would receive payments for developing the specials and made-for-TV movies, as well as a $15 million "termination fee."
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