Reality Check is a Deadline feature series covering the players, programs and trends in reality television.
In mid-May, 21st Century Fox surprised industry watchers when it announced its intent to form a joint venture with Apollo Global Management that would include the Shine Group, Endemol and CORE Media Group. Apollo had been known to be contemplating a tie-up of Big Brother producer Endemol and American Idol parent CORE Media, but the Shine element was new. What was unsurprising was this further move towards consolidation in the TV production sector which has seen myriad companies – big and small — acquired by the likes of Discovery, Warner Bros, ITV, Sony and Red Arrow to name a few, in the past year and a half. Folks caution that it’s still early days for a potential combined Shine-Endemol-Core, but that the desire is there to see such a deal come to fruition. If it does, it will create a so-called Mega Indie that would be one of the world’s biggest independent production companies working across both scripted and non-scripted. 21st Century Fox and funds managed by affiliates of Apollo would co-own and manage the new joint venture.
To break it down, Netherlands-based Endemol owns 90 companies in over 30 countries and annually produces over 15,000 hours of programming. In 2012, its revenues are understood to have been around £1.1B ($1.9B). Its major non-scripted brands include Big Brother, Deal Or No Deal, Your Face Sounds Familiar and Wipeout.
Shine, founded by Elisabeth Murdoch, was acquired by dad Rupert Murdoch’s News Corp (now 21st Century Fox) in 2011 for £415M. It owns 26 production companies across 11 countries including Kudos, Dragonfly, Shine TV, Shine America and Shine Nordics. Flagship shows on the non-scripted side include MasterChef and The Biggest Loser.
The combination of all three would create “a leading global production business with a diverse portfolio of shows that is creating, producing and selling content in more markets around the world,” an exec says. Important are the relationships that each entity brings to the table, along with an enhanced distribution network. “It’s beyond playing on a much broader international playing field,” I’m told.
The proposed mega-indie would also bring scale that allows the partners to continue to compete in the global marketplace, taking risks and attracting top talent. That’s especially important in a climate where the big reality staples are showing their age and boundaries are being pushed to come up with the next big thing. (It’s also true for the scripted side where TV is now drawing top-drawer names in front of and behind the camera.)
My sources all felt it was too early to start speculating how exactly the Shine-Core-Endemol JV would operate, but in terms of cross-pollination I’m told “Everyone needs to look at the respective strengths and who complements what in terms of genre, culture, personnel and relationships with broadcasters.” The top executives at Shine (Alex Mahon), Endemol (Just Spee, Tim Hincks) and CORE (Marc Graboff) are said to be part of a transition committee tasked with figuring out the structure of the proposed venture and are considered prime candidates for the partnership’s leadership.
Endemol is the biggest of the three companies in size and reach, which explains its larger presence on the committee, but Shine has a lot of labels in the UK where it is well dug in. Those are unlikely to be reduced or consolidated with each continuing to play to its strengths. One of Endemol’s strengths will be the platform it brings. So, if a show becomes a hit in one territory, it can be rolled out very quickly across the network. One example is Your Face Sounds Familiar which Endemol developed in Spain and later spread out to about 20 markets. Now, shows developed by CORE and Shine would be expected to follow the same pattern. “It’s all about owning IP. What you bring together is creatives and producers of some of the most successful content across the genres who have an incredible presence in the marketplace,” says one exec.
A company that seems to have been left off the consolidation bandwagon is FremantleMedia (The X Factor). There was speculation in the market a few months ago that the RTL-owned company would make a play for All3Media, but Discovery and Liberty Global ended up acquiring that company. One exec cautions that this merger spree is cyclical, and that often companies combine and people leave and start new companies, creating new acquisition targets and so on. The proliferation of channels and the appetite of the audience still need to be fed and new producers are still cropping up left and right. “If anything, it’s rejuvenating for the market.”