Robert Half International (RHI)

RHI Entertainment, Inc. develops, produces and distributes new made-for-television movies, mini-series and other television programming worldwide. The Company provides long-form television content, including domestic made-for-television (MFT), movies and mini-series. It also selectively produces new episodic series programming for television. In addition to its development, production and distribution of new content, it owns an library of existing long-form television content, which the Company licenses primarily to broadcast and cable networks worldwide. RHI Entertainment, Inc’s business is comprised of the licensing of new film production and the licensing of existing content from its film library in territories worldwide. Licensing rights in its film library generate contractual accounts receivable. The contractual accounts receivable reflects license agreements it has entered into with third parties for rights to its film content in future periods.

Klarman's Baupost Group purchased an additional 437,000 share of RHI at $1.19 a share.

Klarman now has 36.9% of the outstanding shares.

Now, this is an interesting one because a quick glance at the financials reveals nothing that would make someone jump up and say "I've been buying at almost 5 and now it is under two, let's pick up a whole lot more shares". This is, however just what Klarman did. Klarman is also one of the best investors out there now so paying attention to him makes sense.

Put your thinking cap on here. The company's top customers are the Hallmark channel and Lifetime. What risk is there that they could lose, say the Hallmark account? This why you read the 10-k notes:

On January 12, 2006, HEI Acquisition, LLC acquired all of the membership interests in Hallmark Entertainment from HEH, subject to a Purchase and Sale Agreement (PSA) dated November 29, 2005 (the Acquisition). HEI Acquisition, LLC was immediately merged with and into Hallmark Entertainment and its name was concurrently changed to RHI LLC. RHI LLC’s sole member is Holdings, a limited liability company controlled by affiliates of Kelso. (RHI owns 46% of Kelso...note mine)

The Company acquired Hallmark Entertainment in order for it to execute its business strategy. The purchase price reflects the Company’s assessment that Hallmark Entertainment could be managed more efficiently and profitably when operated independently allowing the Company to refine its business model and production strategy by focusing on the most profitable content rather than volume, broadening and diversifying the type of content that it develops, produces and distributes and exploiting new distribution opportunities.

You know the "Hallmark Original" movies you see on the channel? Yup, they make em'

A 2008 10-Q says it more clearly:

On January 12, 2006, Hallmark Entertainment Holdings, LLC (Hallmark) sold its 100% interest in Hallmark Entertainment, LLC (Hallmark Entertainment) to HEI Acquisition, LLC. HEI Acquisition, LLC was immediately merged with and into Hallmark Entertainment and its name was changed to RHI Entertainment, LLC (RHI LLC or the Predecessor Company). Subsequent to the transaction, RHI LLC’s sole member was RHI Entertainment Holdings, LLC (Holdings), a limited liability company controlled by affiliates of Kelso & Company L.P. (Kelso). RHI LLC is engaged in the development, production and distribution of made-for-television movies, mini-series and other television programming (collectively, Films).

On June 23, 2008, RHI Entertainment, Inc. (RHI Inc. or the Successor Company) completed its initial public offering (the IPO).

But in the words of Apple's Steve Jobs "wait, there's more"

The Hallmark Channel is owned by Crown Media Holdings (CRWN). Back to the 10-k:

On October 5, 2006, the Company entered into a definitive agreement with Crown Media to purchase Crown Media Distribution, LLC for $160.0 million (subject to certain accounts receivable adjustments). The assets of Crown Media Distribution, LLC are comprised of a completed film library consisting of approximately 550 titles and approximately 2,400 hours of programming (Crown Film Library) and trade accounts receivable.

So, you know the "Hallmark Hall of Fame" movies? Yup, they own them.From Crown's recent 10-k

Until we sold our domestic library to RHI Entertainment LLC on December 15, 2006, we licensed our film assets to broadcasters and video distributors (pay television channel providers) who paid a license fee for the right to exhibit or distribute the programming over a certain period of time.

In short, they essentially own the content Hallmark runs on its network. Nice.