Inside the Endemol Shine sale saga

Peaky Blinders

The ongoing saga of the Endemol Shine sale could be nearing an end, with a number of sources pointing to a small group of players in the running, including Liberty Global-backed All3Media and part-owner Disney itself.

Disney, which owns half of Endemol Shine as per its acquisition of 21st Century Fox’s entertainment assets, is understood to have renewed interest in the Big Brother and Peaky Blinders prodco as it struggles to meet a sound price for Endemol Shine and its own strategy shifts over time.

While Disney was once thought to be eager to sell off the business, whose adult-oriented IP was seemingly at sharp odds with the Mouse House’s family-friendly branding, it is believed to be having second thoughts about Endemol Shine’s place within its wider portfolio, particularly given its operational control of Handmaid’s Tale and Four Weddings And A Funeral streamer Hulu, which is to host Disney’s more risqué offerings.

Endemol Shine’s prominence across Europe, as well, is seen as an important advantage for the business in the hands of Disney, which operates channels and, as of early next year, TBI understands, streaming service Disney+ out of Europe. With European content quotas soon coming into play, the company will need to think long and hard about how it supplies these channels and platforms.

“They will need a lot of local production bases to make this content, and Endemol also has hubs that could be used,” said one senior source with knowledge of the Endemol Shine sale.

TBI understands there are hopes a deal will be struck by year’s end, which marks the close of the financial year for Endemol Shine, whose ownership deadlock is affecting morale as well as business, as it becomes challenging to drum up investment for certain programmes.

“It’s always complicated if you’re looking for investment in new shows. What we’re investing today won’t come to fruition for sales for two years,” said one source at the business.

It is believed that Endemol Shine staff are keen for a sale to come as soon as possible, with one exec noting the business “should go to someone who really wants it, and will give it a shake”. The business marks its return to Cannes next week after sitting out MIPTV, and will be bringing around 120 staff to MIPCOM.

All3Media and ViacomCBS

Aside from Disney, All3Media continues to come up frequently in discussions.

As first mooted by TBI, All3 took another look at acquiring the company over the summer – a deal that would, no doubt, turbocharge its place on the global content stage.

However, execs close to the company have told TBI that an All3Media and Endemol Shine merger would “be tough for everyone involved” due to extensive crossover across genre and geography that could be tricky to navigate, particularly across distribution outfits All3Media International and Endemol Shine International. It is worth noting, as well, that Endemol Shine International’s well-respected CEO Cathy Payne is leaving the company in 2020, as revealed by TBI.

All3Media’s profile, meanwhile, has never been higher, with CEO Jane Turton recently named chair of the Royal Television Society and COO Sara Geater serving as chair of UK trade body Pact. The business also scored a sexy deal with Netflix with Studio Lambert’s The Circle.

One other contender for Endemol Shine, TBI understands, is the newly merged ViacomCBS, which joined forces in August, and clearly has cash to burn judging by the nine-figure deal it is reportedly mulling for Pulp Fiction studio Miramax Films.

Viacom’s acquisition of AVOD service Pluto TV earlier this year has been a key move for the New York-headquartered business, and as one industry vet put it, “buying libraries such as Endemol’s will make sense for them” going forward in order to feed Pluto TV and Star Trek streamer CBS All Access a pipeline of content. Afterall, as Pluto TV boss Tom Ryan told TBI last month, “By no means is Pluto TV becoming a streaming outlet for Viacom content”.

Read on for a brief history of Endemol Shine and a timeline of the sales process so far.

Broadchurch

Potted history

It is perhaps worth rewinding to recollect the shockwaves that were sent through the industry when the company was first created five years back, not least because it provides an insight into the problems facing potential buyers today.

In May 2014, Elisabeth Murdoch’s Shine Group, owned by 21st Century Fox, was combined with format giant Endemol and US counterpart Core Media, which were both owned by investment firm Apollo Global Management. Core was behind shows such as American Idol, while Endemol was famed for Big Brother and Shine’s slate included hit drama Broadchurch.

The deal created an IP giant and the repercussions did not take long to filter through. In particular, it was the exodus of respected execs that made initial headlines: Shine CEO Alex Mahon left; Murdoch departed; Core Media’s CEO Marc Graboff exited.

And others followed: Shine’s former COO Tim Robinson, its sales chief Nadine Nohr and its Americas boss Rich Ross all headed for the door, followed by drama supremo Jane Featherstone. A year or so later, Endemol Shine UK chief Lucas Church joined the ranks of former employees, along with Endemol Shine Group president Tim Hincks.

At the same time, Endemol Shine CEO Sophie Turner-Laing was attempting to navigate this giant IP oil tanker through an industry that was rapidly changing as SVODs made waves.

Core Media had already been hived off, having remained apart from the wider group after it attempted to refinance its debt. The company eventually filed for Chapter 11 bankruptcy protection and emerged as a slimmed-down producer.

Now befitting its name, Endemol Shine was focused on making the most of its size. Efficiencies were put in place on a staffing level and a focus on making the company’s huge – and impressive – back catalogue of shows such as MasterChef and Big Brother was underway.

But all the while, there was one eye on the clock. Apollo, like any private equity outfit, had a five-year plan that involved making the company look suitably attractive to future buyers.

The fly in the ointment was that Fox owner Rupert Murdoch spotted the fast-approaching industry consolidation in the US and decided competition wasn’t for him. Instead, he sold a swathe of his assets to Comcast and Disney, triggering a potential sale of the business.

Current events

In early 2018, Endemol Shine hired Deutsche Bank and Liontree to look into a sale, which was also partly because Disney – poised to acquire the 50% stake in the company as part of its wider Fox deal – didn’t want to retain the Hunted producer on its books.

The Peaky Blinders and All Together Now producer had initially attracted interest from a raft of outfits including Lionsgate, Banijay Group, All3Media, Endeavor, Sony and RTL-owned Fremantle, but it was ITV that became a leading frontrunner.

Following a six-month perusal of the production and distribution giant’s books, however, the UK broadcaster unusually issued a statement in September 2018 that formally ruled itself out of the immediate running in a race where competitors were rapidly diminishing in number.

The reason for that was largely because of Endemol Shine’s debt, which is estimated at more than $2bn. Banijay became the next suitor to make headlines, putting together a deal worth north of $3bn – which included that extensive debt pile. The deal didn’t fly, and everyone paused for breath.

Following a winter break of sorts, sales proceedings were rebooted earlier this year, with Banijay again leading a much-diminished pack that was fuelled by a reassessment of the company’s value: it is believed that the price for the business has dropped from initial estimates pricing the company at around $3.5bn to around $2.5bn more recently.

But again, despite talks that involved a potential break-up of the Black Mirror prodco, the French outfit backed away. TBI understands the companies are no longer focused on an acquisition and have turned their attention elsewhere.