The economic downturn won’t, it seems, put an end to larger producers, distributors and broadcasters hoovering up indie programme makers.
In the week that RDF continues to finalise its £53m ($79.4m) management buyout, a raft of Big Media companies went on the record to say they are scouting for indie producers, with several deals in the offing.
Some expect the deal flow to be slowed by indie owners placing unrealistic valuations on their businesses — for ‘unrealistic’ read ‘pre-credit crunch’ — and the companies looking to buy will certainly be putting less on the table than 12 months ago.
But, while lower valuations might deter some indie bosses from selling the companies they have toiled to build, others will have little choice.
John Cresswell, COO of the UK’s largest commercial broadcaster ITV, said this week that as it comes under financial pressure, it will pressure its suppliers for better deals. With ITV and other large commercial broadcasters’ relentless focus on primetime that means that unless you are producing a ratings juggernaut that goes out in peak viewing time you will be squeezed. Producers of daytime fare or kids programming for example will feel the pinch.
So, who’s shopping and what’s on their shopping lists? Speaking at this week’s Media Leaders Summit in London (organised by the publishers of TBI Magazine) senior executives from Fremantle, Endemol, NBC, ITV and Zodiak were among those that said they want to buy content companies.
Fremantle CEO Tony Cohen said that fragmentation and the proliferation of new channels is creating a huge demand for programming. The company recently took a stake in Australian producer and distributor Beyond and Fremantle parent company RTL has a €1b war chest for acquisitions. Fremantle’s growth has primarily been organic in recent years, but it is now looking to buy. "We will do more acquisitions in the future. We’ll change the balance from all organic to organic and acquired and there are some [deals] in the pipeline," Cohen said.
ITV has already invested in Mammoth Screen, 12 Yard and digital production house Electric Farm and John Cresswell said it is scouting for more deals along the same lines. ITV is suffering badly from a sharp downturn in advertising revenues and a depressed share price, but wants its Global unit to generate revenues of £1 billion by end-2012. "Content is at the heart of our turnaround strategy," Cresswell said. "We have to think of ourselves not as a UK broadcaster, but as a global entertainment company."
Patrick Svensk, CEO of producer and distributor Zodiak said that its parent company DeAgostini, was keen to acquire. Endemol’s digital media boss, Adam Valkin, chimed in and said that it was looking to buy into production companies.
NBC is also keen to acquire and about to unveil a Russian deal. It recently acquired British indie producer Carnival Films and is set to close a deal for an as-yet-unidentified Russian producer that was described as "smaller than Carnival Films but an established business", by Pete Smith, the company’s president, international.
Smith went on to say that the company’s acquisition spree will not be halted by the economic downturn. "Clearly there are going to be far fewer deals but on the other hand we are seeing assets become more affordable," he said.