MADRID — Substantially broadening its already significant fiction business, European TV giant Endemol has formed a strategic alliance with Underground, one of Argentina’s youngest but hottest telenovela producers.
Deal sees Endemol taking a minority stake in Underground and, as crucially, inking a 50/50 exclusive co-production agreement with Underground, which includes exclusive distribution rights to all future Underground properties.
The alliance rolls off Endemol and Underground’s co-production of telenovela hit “The Successful Mr. and Mrs Pell$,” a 120-episode Latino soap, which is hitting shares of more than 50% on leading Argentine broadcaster Telefe.
Launched 2006, Underground co-produced sex change comedy “LaLola,” one of Latin America’s standout novelas of 2007, which was sold in multiple foreign territories by Dori Media Group.
For Endemol, the Underground deal reps a chance to tie down one of the pacemaking producers in Argentine telenovela production.
In October, Mexico’s Televisa signed a similar 50/50 co-production and distribution accord with Cris Morena Group and sister company RGB Ent., two of Argentina’s top production houses.
Endemol already posts some Euro200 million ($266 million) in annual revenues from fiction production. Most, however, is highly localized. Telenovelas offer more international potential.
“One of the key growth opportunities for Endemol is to significantly increase our activities in the telenovela business, which is no longer just a Latin American phenomenon, but a rapidly expanding part of the international TV market,” said Martin Kweller, Endemol Argentina managing director.
For Underground, the deal reps a potential escape from Argentina’s doubly whammy of inflation-fuelled rising production costs and fiscal tightness at local broadcasters, making international distribution a must to move into profit on productions.
Endemol and Telefe are distributing internationally the finished series and scripted format of “Pell$.” Major territory deals will be announced shortly, Endemol said Monday.
Charles Newbery contributed to this report.