All in the family

May 1, 2010 by Lindsay Gibb

Over the last year and a half, as the rampaging economic downturn continues to make its impact felt in television production, a number of powerful indies in the factual, reality and documentary realms have sold to larger companies, putting them under wider umbrellas and placing them next to production companies with varying specialties. For indie prodcos that have carved out solid reputations and business relationships in their own territories, going global by selling stakes to an internationally-minded parent can be the best way to grow their businesses.

‘Certainly we’ve had people approach us in the past [about] possibly acquiring the company,’ says Jon Murray, co-founder with Mary-Ellis Bunim of Los Angeles-based Bunim/Murray Productions. The duo joined forces in 1987 to create the company that produced one of television’s longest-running reality shows, The Real World, and that also made a mark as an early innovator of the reality-comedy genre with The Simple Life.

In March of this year, after rumors circulated of a potential sale to John de Mol’s Talpa Media, it was announced that Bunim/Murray was sold to Paris-based Banijay Entertainment. ‘Bunim/Murray is one of the few companies with a proven history of delivering high volumes of entertaining and quality programming that strikes a chord with viewers and are continually renewed by networks season after season,’ said Banijay chairman Stéphane Courbit at the time of the announcement.

Murray remains as chairman of Bunim/Murray in the deal, and continues to head up creative development, with president Gil Goldschein continuing to oversee corporate initiatives and tactical growth. While back in the early days, selling wasn’t an option in their minds, over the past few years Murray began examining the landscape and found that becoming a part of something bigger was the best way to grow his business.

Danny Fenton, CEO and co-founder of London-based Zig Zag Productions, agrees with this sentiment. ‘It’s medium-sized companies that are the most vulnerable right now,’ he says. ‘Becoming part of something bigger is the next step in our growth.’

Zig Zag, founded by Fenton and COO Kevin Utton, set sail in 1999, spending the first five years of its life on a WWI warship moored on the Thames. After a lot of work with Channel 5 turned into regular projects with Channel 4, the company grew from a few men on a boat to a team that eventually made its way to land-based offices in London. Seeing the company grow up, for Fenton, meant that in its 10th year it was time to ‘become an adult’ by making the leap to a larger entity. In its case, a deal with Banijay had been on the table since MIPCOM in 2009, and was finalized and officially announced in January of this year.

While, as Murray and Fenton maintain, becoming part of something bigger can nurture a production company’s growth, landing with the most suitable suitor is key. UK-based Darlow Smithson Productions (DSP) was, in 2006, snapped up by IMG Media’s TV rights and production division Transworld International, along with Tiger Aspect Productions and natural history shingle Tigress. Near the end of 2009 IMG Media started selling some of its media assets, and Endemol UK opted to purchase the three prodcos from the sports agency and media group. At the time Chris Davis, IMG’s executive VP and CFO commented that, ‘These companies have never been synergistic with IMG’s core business.’

Thus, it’s no wonder that Darlow Smithson’s executive director and chief creative director John Smithson found the move to Endemol a good fit. ‘IMG was a very smart company but was working across a lot of areas,’ says Smithson. ‘What we noticed immediately with Endemol is they are this very big, global, independent production company. They’re a bigger version of us, so in that respect it’s very good to be part of a company that absolutely understands your business.’

Just prior to the sale to Endemol in November 2009, DSP and Tigress announced a partnership which saw Smithson taking responsibility for the output of both companies. The partnership meant that Smithson would funnel ideas to Tigress that were more in line with the output of the natural history and adventure specialist than that of DSP, and would also lend his expertise to help grow Tigress’ business. When Endemol became the parent company of both prodcos, Smithson says it didn’t want to change anything about this relationship. ‘I think they saw the sense in that structure and were happy for that to continue.’

Maintaining creative freedom is also an integral component of building a successful relationship with a parent company. Shortly after the acquisition of the three prodcos, Endemol UK chief executive Tim Hincks told realscreen, ‘The big mistake people in this sector make is to think that you can get growth by other means than creative… by working with these companies and their creatives we’re increasing our likelihood of having more and more hits.’ Smithson says DSP and Tigress’ new parent doesn’t interfere with the day-to-day of their businesses.

Fenton feels the same way about Banijay. ‘They call themselves a ‘confederation of entrepreneurs’ and what they like to do is allow people the latitude to carry on doing their thing while offering the kind of support structure and mechanism to let them do that,’ he says. He adds that while there is now a regular dialogue between Zig Zag and Banijay, it doesn’t impede his company from moving along, business as usual.

Fenton says that when he was looking for the right fit in a parent company the reason Zig Zag settled on Banijay was in part because the entertainment group didn’t have any other UK-based prodcos under its umbrella. ‘It felt like we were going to help shape the destiny of the group and be a part of taking it forward because, as a company, Banijay is less than two years old,’ he says. If Zig Zag joined a super-indie that already had multiple UK-based prodcos in the fold, ‘we would be no more than a pimple on an elephant’s buttock.’

Creatively, the sharing of ideas and formats as part of a new international family is also a plus. Of the three company heads, Smithson has had the longest time frame to get used to his new parent and he says he finds jointly brainstorming ideas with the other companies under Endemol’s umbrella has been useful both in getting fresh perspectives and sharing concepts throughout the company.

A small part of the reason Murray decided to sell after over 20 years as an independent relates back to the death of Mary-Ellis Bunim, six years ago. ‘While no one will ever be able to replace Mary-Ellis, I think it does make me feel like I’m part of a big organization and I have other people I can exchange ideas with,’ offers Murray. ‘It goes a little way to filling that void.’

The deal also opens up the pipeline to new possibilities in the format arena for the prodco. ‘By becoming part of Banijay, I now have a flow of formats from those other companies in France, Spain, the UK, Norway and Finland,’ explains Murray.

Murray says he was able to sit down with the rest of the Banijay family of companies during MIPTV in April, to discuss projects and share formats. He brought home 10 to 12 titles he will be shopping to U.S. buyers while his own program, Love Games, for which he retained international rights when it sold to Oxygen, is being shopped around the world by Banijay International. While Bunim/Murray is still developing its own original ideas, Murray says formats are appealing because U.S. buyers increasingly want to see tape and know that a show has a good track record before it will take a chance. Sharing ideas between companies and territories will also come in handy for Murray when he isn’t able to sell an American buyer on an idea that may be a bit experimental. ‘Now, potentially, I could work with one of the other companies to maybe do it first in the UK or Germany and then bring it back here,’ he says.

Zig Zag is also looking forward to sharing formats within Banijay, but Fenton wants to emphasize that his company is not planning to completely abandon the factual business for the format business. ‘Clearly, to get the maximum benefit from Banijay, a format is going to travel better than factual,’ explains Fenton. ‘But we will continue to do factual because it’s something we’re good at.’