Consolidation was the buzzword at MIPCOM, the international TV market that wrapped Oct. 20 in Cannes, with news of buyouts, both real and imagined, that could shape the future of the global production business. On the eve of the event, global production and sales juggernaut Banijay, producer of Big Brother, Peaky Blinders and Temptation Island, signed a deal to acquire Australian nonscripted giant Beyond International, makers of MythBusters and Highway Thru Hell.
And the two halves of Rupert Murdoch’s media business — News Corp and Fox Corp. — disclosed that they are considering reuniting nearly a decade after splitting. Once MIPCOM kicked off, rumors that British producer-distributor ITV Studios (Love Island, Night on Earth) was up for sale dominated cocktail conversations. Reported suitors Banijay and fellow Euro giant Fremantle (makers of the American Idol and X Factor franchises) said they weren’t interested, but ITV stock jumped 10 percent with the “news.”
On the international television scene, the logic of consolidation is hard to ignore. The demand for new shows and series continues to grow worldwide, driven by the insatiable appetite of global streamers, but rising interest rates and a looming recession are putting downward pressure on costs, making it harder for independent production companies to compete. The solution: Get big (and leverage that new IP to command better deals from buyers) or go home.
Banijay became international television’s 500-pound gorilla two years ago when it completed a $2.2 billion deal to acquire Survivor and Deal or No Deal producer Endemol Shine. In May, the company merged with French online gambling company Betclic Everest Group to create FL Entertainment and went public. With a combined annual revenue and operating profits of $3.45 billion and $600 million, respectively, the merged company has plenty of money to spend on gobbling up competitors. At MIPCOM, Banijay CEO Marco Bassetti said in the next five to 10 years, securing “IP and talent” will be the “most important way of creating value.”
Banijay competitor Fremantle seems to agree. The company, owned by RTL Group, a division of German media giant Bertelsmann, is targeting $3.45 billion in revenue by 2025, compared with its company record of $1.9 billion last year. Much of that growth will come from M&A. In the past year, Fremantle took control of Irish production studio Element Pictures, producer of series like Normal People and Oscar winners The Favourite and Room, and Italian operation Lux Vide, known for high-end series like Medici.
Speaking at MIPCOM, Fremantle CEO Jennifer Mullin said her company was “not buying growth” but seeking “businesses, creatives and companies that feel like a good fit, that feel complementary to the type of content we are already producing,” noting that Latin America and India will be a focus in the near future.
Private equity also has discovered the potential of international TV, with KKR backing German production and distribution group Leonine, a mini-major that bundled several local independents, including distributors Tele München Group and Universum and producers Odeon Fiction and Wiedemann & Berg. There’s also the PE-backed French group Federation (The Bureau) buying up the likes of London-based Vertigo Films (the TV series Britannia). Leonine has formed a joint venture with French production group Mediawan (Call My Agent!) that also is shopping around; it recently snapped up control of U.K. producer Drama Republic (Doctor Forster) and is reportedly in talks to take a significant stake in Brad Pitt’s Plan B.
The race is on between the studios and streamers, which are trying to keep as much content in house and independent production companies like Banijay and Fremantle that want to hold onto as many rights as they can, even as they make more and more shows for online platforms. The independents think they could have an advantage in the battle for talent as exclusive deals, like Netflix’s multiyear agreements with Ryan Murphy and Shonda Rhimes, have fallen out of favor with many top creatives, who’d prefer to see more backend for the projects they develop.
Bassetti took aim at the all-rights buyout deals common among streamers, saying it isn’t fair to ask talent “for everything and then when they are a huge success, they don’t get anything [back]. When you give producers the opportunity to invest and retain part of the rights, they will do a better job.
“The financial market has decided this is a golden age for content,” added Bassetti, but “this is not the golden age of revenue sharing.
This story first appeared in the Nov. 2 issue of The Hollywood Reporter magazine. Click here to subscribe.