Levham Holdings has struck a deal to acquire Digitmation's 4.3% interest in Sportscope Television Network, making it the controlling shareholder of Sportscope, which runs Headline Sports.

An appeal launched by John Levy, president and ceo of Sportscope and Levham, challenging an Ontario Court of Justice decision regarding Shaw's sale last month of 47.85% of Sportscope to Alliance Atlantis without adhering to the Sportscope Shareholders Agreement may be dropped.

Before this latest deal was signed March 30, Levy Group launched an application with the Court of Appeal for Ontario seeking to overturn a decision that Shaw was not part of the Sportscope Shareholders Agreement and therefore was not required to comply with its ownership change stipulations.

David Roebuck of Roebuck Garbig, solicitors for Levy, says, "If the appeal were to be successful, Shaw would have been required to get 90% shareholder approval to go ahead with its sale."

Now that Levham has a controlling interest in Sportscope, Levy says there may not be a need for his appeal. "We are hopeful that this acquisition of the additional 4% will resolve the issue that prompted the appeal," says Levy. "We will be investigating a new relationship with shareholders."

On March 19, aac acquired a 47.85% interest in Sportscope for $16.2 million. aac's agreement to purchase Shaw's shares of Sportscope was reached with crtc-approved trustee Keith Campbell.

When aac made its investment in Sportscope, the two companies agreed that Levy should remain as the specialty channel's president and ceo.

aac's partnership with Sportscope as a minority shareholder reflects a new way of doing business for the production giant. But Lewis Rose, president of aac, underestimates any shift in aac's operating philosophy. He says in some of the company's applications for new specialty channels that are still before the crtc, aac is a minority shareholder.

Michael MacMillan, aac chairman and ceo, says his company's interest in Headline Sports is consistent with their strategy of developing non-fiction theme specialty channels such as Life, hgtv, History and Food. "We think these are channels that can and ought to reconstitute themselves in new media and interactive forms," says MacMillan.

"Sports is a key driver in cable channels," adds Rose. "Headline Sports has grown quite successfully. This is a unique growth opportunity."

With aac's investment in Headline Sports, the production company will now have direct ownership in five specialty channels. In the next couple of months, aac is expecting crtc approval of its French versions of Showcase, History and hgtv.

aac has also filed for eight other English-language specialty channels including a National Geographic channel, a fitness channel, a health channel and a people channel. These applications were part of the crtc's Sept. 30, 1997 deadline, but approval has been held up as the commission is currently reviewing its criteria for licensing new pay and specialty television services and the transition to digital broadcasting.

The deadline for submissions for the crtc's review of specialty services is May 14.

Like everything else in Canada, the AAC Sportscope deal is subject to crtc approval.