In the midst of the press fervor that always precedes NAB, Thomson quietly picked off the little company that triggered a seismic ripple in television production automation. Thomson bought the video division of ParkerVision for $14 million in a cash deal expected to close in the first half of this year, contingent on stockholder approval.
ParkerVision, (Jacksonville, Fla., employee pop. 123), made a name for itself in television over the last few years with the introduction of the industry's first automated TV control room in a box, the PVTV. Thomson (Paris, Earth, employee pop. 73,000) followed last year with the "TV Station in a Kit," which will be folded in with PVTV, according to Marc Valentin, Thomson Broadcast & Media Solutions President.
"The ParkerVision system is exactly what is needed for TV Station in a Kit," he said. "It's one of the main interests of the acquisition."
ParkerVision's actual inventory of PVTV systems is not large, according to chairman and CEO Jeffrey Parker. The essence of Thompson's purchase is the research that went into PVTV, and a marketing strategy. PVTV systems will henceforth be built using Thomson Grass Valley products, including the Kalypso switcher, which has already been integrated into the system. The Thomson-built PVTV systems will retain the ParkerVision name as a sub-brand, similar to the way Thomson uses the Grass Valley name.
The promise of adopting PVTV was a reduction in payroll to the tune of about five salaries. With PVTV, a single person could run a control room. Cautious at first, the broadcast industry started embracing automation when the upcurve of digital reliability intersected the downcurve of the economy. In 2002, Parkervision doubled PVTV deployments to a total of 40 systems, installed in schools, business, production centers and TV stations. According to Parker, broadcasters alone now account for 40 PVTVs in the market.
Among adopters, stations belonging to McGraw Hill, Clear Channel, LIN Television and Gray Television; ABC Network, Media General and Cablevision's five News 12 stations. The Canadian Broadcasting Corp. bought a PVTV system last year for its Windsor, Ontario affiliate, where the system was integrated with Avid iNEWS systems. Thomson's Valentin said such legacy systems, supplied and integrated with equipment from other vendors, would continue to be supported.
"We're already supporting a number of installations around the world without our products," he said. "That's not a problem for us."
While the adoption of PVTVs has indeed picked up, it was clearly not enough to support itself. ParkerVision reported Q3'03 revenues of about $1.4 million, generated exclusively by sales of PVTV products, but had an overall net loss of $5.6 million. ParkerVision posted an average net loss of just under $5 million for each of the four preceding quarters.
The company generated around $20 million last November with a private placement of 2.3 million shares at $8.75. ParkerVision shares closed at around $6 Thursday. Most of ParkerVision's money and then some went into research and development. In 2002, on revenues of $11.9 million, ParkerVision invested $13.9 million in R&D. The previous year, on revenues of $2.4 million, ParkerVision spent $3.5 million on R&D.
Following the sale. ParkerVision will focus its resources on its wireless products business, which includes the Horizon wireless network cards.
