Analysis: The new age of M&A

As a wave of acquisitions sweeps through the unscripted production world, realscreen talks with About Corporate Finance head Thomas Dey (pictured) to find out what's behind the deals, and what may be next.
March 27, 2014

As a wave of acquisitions sweeps through the unscripted production world, realscreen talks with About Corporate Finance head Thomas Dey (pictured) to find out what’s behind the deals, and what may be next.

As January drew to a close, the Realscreen Summit brought together the non-fiction industry’s major players and power-brokers to negotiate the key programming deals that will shape the factual TV agenda for the next 24 months.

But this year was a little different. In addition to the contracts for shows, the Washington DC event was also abuzz with talk of a handful of multimillion-dollar mergers and acquisitions that would radically alter the power structure of the unscripted sector.

Indeed, in the five weeks that followed the Summit, more than half a dozen major takeovers were completed.

On February 3, UK super-indie Tinopolis Group announced that it would be investing further in the U.S. production landscape with the acquisition of Jane Lipsitz and Dan Cutforth’s indie Magical Elves (Top Chef, Fashion Star).

Just over a week later, on February 11, Warner Bros. Television Group entered into a nine-figure deal to acquire all of Eyeworks’ businesses outside the U.S., covering 15 countries across Europe, South America, Australia and New Zealand.

Two days later, global production group Argonon acquired UK-based Monster Moves prodco Windfall Films. On February 19, UK broadcaster ITV acquired a majority stake in DiGa Vision, the reality and scripted prodco from Tony DiSanto and Liz Gateley; and on the last day of the same month they also acquired Louise Ellerbæk and Mads Lund’s Danish indie United.

Two days earlier, on February 26, Red Arrow Entertainment Group bought a majority stake in Half Yard Productions, the indie behind Say Yes to the Dress and American Loggers; and five days after that, Discovery Communications completed a deal to acquire Raw TV, the UK indie behind hit series Gold Rush and BAFTA-winning feature doc The Imposter.

Yesterday (March 26), FremantleMedia announced a deal to acquire 75% of SallyAnn Salsano’s Jersey Shore indie 495 Productions, and today ProSiebenSat.1 declared that is was taking an equity stake in the multichannel network Collective Digital Studios.

Not since the heavy consolidation years of 2006 to 2008 has there been such a feeding frenzy.

About Corporate Finance (ACF), an advisory firm with offices in London, New York and Los Angeles, had a hand in five of those deals, having acted as investment banker for Half Yard, Magical Elves, Raw TV, Windfall Films and 495 Productions.

According to Thomas Dey, ACF’s president and CEO, a number of factors have led to a perfect storm of M&A activity, most notably the growth of digital platforms, and the strengthening economy.

“The main driver is the digital space,” Dey tells realscreen. “The drive to bring content production in-house has to be a strategy driven by protection against digital.

“A lot of these broadcasters and networks, they can now effectively be replaced with a laptop. So what’s their USP? Their USP is their brand, not the route of reaching the consumer. People are seeing it coming and recognizing that if they don’t bring it [production of original content] in-house, then what will they become?”

In addition to networks needing to redefine their role, a rebounding economy has meant that “everybody’s feeling a bit more bullish now in the marketplace,” Dey says. “There was a drop off just after the banking crisis in mid-2008; for about nine months the whole world ceased to move while everyone stared at their TVs in horror. It’s been a slow trickle recovery.”

But with this strengthening economy, Dey says he has also observed something of a shift in the delicate power balance of buyer-seller courting. “I think it’s just tipping towards sellers,” he says. “Coming out of 2009, I would’ve said that for a short period it was buyers [who were in a better position to negotiate]. Then, for three years, it was an even marriage between the two.

“I think we’ve just moved into sellers having the upper hand, and being able to ask for what they want.”

Dey expects further deals on the horizon, and not just for independent prodcos. Next up, he predicts, will be a consolidation of the super-indies.

“The next 12 to 24 months is going to be the time that the consolidators disappear, they get acquired,” he says. “Eyeworks has now gone, but you’ve got Endemol, Banijay, Zodiak, Tinopolis, Red Arrow… you’ve got a significant number of larger players.

“I think they’ll come into play and they’ll merge or be acquired by the U.S. super-entities, or financial players wishing to build a global network. I think you might even see some other networks coming into play, like a Netflix or an Amazon. How exciting would that be? They would just go straight to retailing content.”

That is not to say, however, that there isn’t still room for further small- and mid-sized indies to be put on the block.

“We have a huge pipeline of work coming through and we’re expecting to announce more deals, so it’s certainly going to continue,” Dey offers.

  • A version of this article appears in the March/April 2014 edition of realscreen magazine, which publishes later this week. Not a subscriber? Click here for more information.
realscreen magazine, march/april 2014
About The Author
Justin Anderson joined Realscreen as senior staff writer in 2021, reporting and writing stories for the newsletter and magazine. During his 20-year career he’s filled a variety of roles as a writer and editor at a number of media organizations, covering news and current affairs as well as business, tech, the film and music industries and plenty in between. He’s also spent time behind the scenes in television production, having written everything from voiceover scripts for documentaries to marketing copy. He has a degree in Journalism from Toronto Metropolitan University (formerly Ryerson University).