Nordic Entertainment Group (NENT Group) has suspended the sale of its non-scripted production arm and cut its programming and production spend as the impact of Covid-19 begins to be felt.
NENT unveiled plans to focus purely on scripted product earlier this year but the plan has been paused amid a raft of cost-cutting initiatives at the Nordic operator, which also owns UK distributor DRG.
The company said it was “implementing a range of measures to reduce its ongoing costs” in a bid to save SEK700m ($65m). These include cutting dividends, slashing executive incentive plans, banning all non-essential travel and not paying for rights to postponed sports events.
Postponing unscripted sale
NENT also said it would “temporarily pause the previously announced process to sell the non-scripted production, branded entertainment and events businesses” in NENT Studios, which include companies such as Strix, Baluba, Monster Entertainment and Novemberfilm.
Moskito, Rakett, Strong Productions and Production House have also been taken off the sales block, along with branded entertainment outfit Splay One, and events firms Playroom, One Big Happy Family, and Grillifilms.
NENT Studios currently comprises 32 companies in 17 countries and had been behind 10 docuseries to date, including Four Hands Menu and English-language show The Art of Living, but the focus has been on scripted, with shows such as Swedish Dicks, Those Who Kill and Love Me.
Late last year, TBI revealed NENT’s recently appointed chief content officer Filippa Wallestam had appointed a six-pronged senior exec team to oversee content, international co-productions and acquisitions for the company, in the latest exec reshuffle.
The unscripted division’s sales process had been due to take place during the first half of 2020, with ACF Investment Bank assisting on the sale of the non-scripted production and events companies. Stella EOC had been working on the sale of the branded entertainment business Splay One, which was being conducted separately.
No details have emerged as to when the sale will be revisited, but the Covid-19 outbreak has heavily impacted financial markets and borrowing costs for businesses. Last week, TBI revealed that German media giant ProSiebenSat.1 had pulled the potential sale of production and distribution arm Red Arrow Studios amid what it termed a “Coronavirus crisis environment”.
Programming & development cuts
NENT, which been rapidly ramping up its scripted orders over the past 18 months, is also reducing its programming and production spend and said it will defer or cancel any non-core or non-essential development projects.
It will also reduce marketing spending but said it did not plan on staffing cuts at present but freelancers would be affected.
“Following the group reorganisation in recent months in order to set the business right for the future, there is no intention to reduce permanent staffing levels, but freelance and consultant costs are being reduced and new hires are only being made for essential positions,” NENT said.
“All non-essential travel and entertainment has been cancelled and the group expects to make even greater use of its existing remote access, sharing and conferencing facilities for the foreseeable future. The measures being taken are intended to protect staff, business continuity and the future potential of the operations when the current crisis comes to an end.”
Covid-19’s ‘adverse impact’ felt
NENT, which had also been looking to secure an investor for its proposed, slimmed down scripted business, admitted earlier this week that the cancellation of sports events was having an “adverse impact” on the group’s performance.
Anders Jensen, NENT’s president and CEO, said: “This is the third announcement in the past week about how we are quickly and proactively responding to the impact of the Coronavirus on our business. We always work to stay ahead of both opportunities and challenges, and we are doing the same now.
“This is an unprecedented situation that is evolving every day, but let me repeat that we remain in good shape and our operations are running with limited interruption, which is all credit to the fantastic resilience and agility of our platforms and people.
“Our top priorities are the wellbeing of our employees and continuing to deliver the best possible value to our customers. The measures that we are now taking are all about ensuring the long-term health and potential of what drives our business – our people, our content and our technology. The viewing, listening and streaming KPIs for our entertainment services are very encouraging, as people spend more and more time with us.”
NENT added that the merger of its pay-TV business Viasat Consumer with Telenor’s Canal Digital will continue as planned, as will the launch of Viaplay in Iceland this Spring.