Once hard-up Brit indies float on a wave of cash

Shed prod'n combo leading the way in TV market

LONDON — It is payback time for Blighty’s increasingly well-heeled top tier of independent TV producers, who now get to keep rights to their shows under new broadcast rules.

But instead of cashing in their chips, these smallscreen entrepreneurs are determined to show the world they mean business.

Take newly minted media millionaire Eileen Gallagher, one of leading British production combo Shed’s four directors.

Despite recently pocketing north of $9 million on the back of a listing on Blighty’s Alternative Investment Market, she says this is not the time to take her foot off the accelerator.

“I’ve never worked harder in my life,” muses Gallagher, who began her career as a press agent and is a former chair of producers’ lobby group Pact. “All we really care about is making the company successful and growing the business.”

Seven-year-old Shed, which has cornered the U.K. TV market in brash, female-centered shows like the raunchy “Footballers’ Wives,” confounded the skeptics when its recent stock market flotation was oversubscribed by a factor of seven.

Demand from investors was such that she and her co-directors were persuaded to sell 51% of Shed, more than intended.

“It’s not that unusual for TV companies working in the rights business or the facilities sector to float successfully, but for a pure content company it was an industry first,” reckons Gallagher. “We’re the first of a new breed.”

Others, however, are queuing up to copy Shed.

May sees the flotation of RDF, producer of reality hits “Wife Swap,” “Faking It” and “Holiday Showdown.”

Others like All3Media, Blighty’s biggest indie, are believed to be contemplating an IPO in the rapidly consolidating sector.

“When you look at the recent activity in the U.K. independent sector, which has included private equity companies taking stakes in companies like Hat Trick, I’d estimate that around £100 million ($190 million) has been invested in British indies during the past year,” broadcasting consultant David Graham says.

“With formats like ‘Wife Swap,’ ‘Who Wants to Be a Millionaire?’ and ‘Survivor,’ British indies have created world-beating shows and are well positioned to benefit from partnerships with U.S. operators.”

This point is not lost on Gallagher.

Last week Shed, which uses the American showrunner method for its drama series, was pitching a U.S. version of “Footballers’ Wives” via a partnership with L.A. production company Coolcat.

“Since ‘Desperate Housewives’ took off, I feel much more optimistic about securing a U.S. deal for ‘Footballers’ Wives,’ ” says Gallagher. “They’re both high-concept dramas based on modern relationships that score well with the under-35s.

“The best way to make content for U.S. broadcasters is to hook up with local producers,” she says. “In the past some British indies have got distracted by attempting to make a show under their own steam in the U.S. I am determined that won’t happen to us.”

But as Gallagher knows, getting a British TV drama onto U.S. screens is a tough call — and nonscripted fare has so far taken the lead for U.K indies.

Since winning its first U.S. commission back in 2000 — “Junkyard Wars” for cabler TLC — RDF now employs 100 people at its L.A. office and has relationships with all six U.S. broadcast networks, plus links with more than 15 U.S. cable channels.

In addition, the combo boasts a thriving sales arm, RDF Rights.

“The recent agreement of the new terms of trade marks a particularly exciting time for U.K. independent TV producers, and the full benefits from this have yet to be seen,” says RDF chief exec David Frank.

“There has been a fundamental transfer of rights value from broadcasters to producers, offering potential for top- and bottom-line growth.

If the RDF IPO is as successful as Shed’s — and all indications are that it will be — expect the company to hit the acquisitions trail.

Frank has said there are “about a dozen companies we are interesting in buying,” including “Supernanny” producer Ricochet.

Shed, which like RDF has cash in the bank, is weighing the potential benefits of acquiring another outfit specializing in entertainment shows to complement its drama portfolio.

All in all, it looks likely to be a hot summer for a part of the British entertainment business that can no longer be derided as a “lifestyle option” for disillusioned producers worn down by years of working for other people.