Endemol and HMG kiss and make up

HMG extends production agreement to 2006

AMSTERDAM — Global production outfit Endemol and three-channel network Holland Media Group (HMG) have finalized a new production deal following a lengthy and costly arbitration.

Executives from both sides are hailing the deal as a new era of peace between the two companies, which have been in and out of court and at loggerheads with each other for several years.

HMG and Endemol were disputing a multimillion-dollar 10-year production agreement that began in 1995. The biggest point of contention was how much HMG was required to spend annually on Endemol productions. In the old agreement, HMG spent €65 million ($74 million) a year on programming produced by Endemol. Under the new deal, although the production spend will be lower, the contract has been extended by one year to 2006.

Endemol and HMG have crossed swords on issues ranging from contract dispute to breach of contract to copyright infringement. Much of the bickering can be traced back to HMG’s decision to step up in-house production and its desire to move into third-party production, throwing a direct challenge to Endemol’s dominance in the territory.

Shows like “Idols” and “The Weakest Link” which might previously have been made by Endemol, are now being produced by HMG.

Dick van der Graaf, CEO of HMG, said the new agreement reflected on both sides a respect for each other and “a positive and equal concentration of strength for the future.” Paul Romer, general director of Endemol Netherlands, called the deal an “outstanding basis” on which to proceed further.

Endemol once had a similarly lucrative production deal with Germany’s RTL, a sister web to HMG under the aegis of the Europe-wide RTL Group. That agreement was not renewed although Endemol still licenses a substantial amount of programming to the German commercial web.