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Endemol to acquire Authentic Entertainment

Reality shingle is home to 'Ace of Cakes,' 'Flipping Out'

Continuing its strategy of expanding aggressively in the unscripted cable market, Endemol North America has scooped up a majority stake in Authentic Entertainment, the bustling reality production shingle behind such cable hits as Food Network’s “Ace of Cakes” and Bravo’s “Flipping Out.”

Sources said the deal is valued at about $60 million-$70 million, depending on Authentic’s financial performance in the next few years.

Burbank-based Authentic was founded by Lauren Lexton and Tom Rogan in 2000. Company’s other productions include TLC’s “Toddlers and Tiaras,” WE’s “You’re Wearing That?” and Food Network’s “The Best Thing I Ever Ate.” All told, the company produces about 200 hours of programming a year for cablers that also include Sundance, Animal Planet and Discovery Channel.

Endemol execs said they have had their eye on Authentic for years. Deal has been in the works for the past six months, though Lexton and Rogan were approached several years ago by Ron Milkes, senior veep of operations, strategy and corporate development for Endemol North America.

Under the direction of chairman David Goldberg, the North American outpost of the global production powerhouse has been buying up or taking stakes in indie unscripted shingles that complement Endemol’s existing businesses. During the past 2 1/2 years, Endemol NA has acquired interests in 51 Minds (“Rock of Love”), Original Media (“The Rachel Zoe Project”) and True Entertainment (“The Real Housewives of Atlanta”).

Goldberg said Endemol pursued Authentic because it was impressed with the creative and business acumen demonstrated by Rogan and Lexton. Now that Authentic has built up good relationships with cable buyers and a highly visible roster of shows, Endemol’s global distribution and marketing heft will help take the company to new heights, Goldberg said.

“We’ve been pushing to get deeper into the cable business to diversify our business, and that’s where their strengths are,” Goldberg said. “But the main thing is that we felt a connection to Tom and Lauren. We believe in their creativity, and we believe that they are committed to continuing to grow their company.”

Authentic will continue to operate autonomously out of its existing offices. Endemol may eventually seek to bring back-office efficiencies to the shingles housed under the Endemol NA banner — which also includes the Endemol USA production unit, home to ABC’s “Wipeout” and “Extreme Makeover: Home Edition” and CBS’ “Big Brother” — but Goldberg wants each company to maintain its distinct brand identity in the creative community.

“They are now Endemol companies but it’s important that we keep them unique and specific brands that all have their own skill sets and relationships, and way of doing business,” he said.

Authentic, repped by CAA, has about 100 full-time employees, not including production staffers on its various shows. The company was formed a decade ago by Lexton and Rogan, who knew each other in their work as freelance reality production staffers. At Authentic, Lexton tends to focus on development while Rogan minds the business side. Both are extremely hands-on during production and post-production of their skeins.

The alignment with Endemol comes at the right time to greatly enhance the company’s growth potential, Rogan said. Authentic does not control franchise or format rights to signature series like “Ace of Cakes” or “Toddlers in Tiaras.” But in becoming part of Endemol, Authentic will bring more clout to the table as it cuts deals for future shows.

“One of the reasons we started talking to Endemol was because we wanted to have more ownership in our product,” Rogan said, noting that “Ace of Cakes” has recently emerged as a huge hit in the U.K. “You spend so much time, effort, blood, sweat and tears to find these (personalties) and to create these franchises — it’ll be nice to share in a larger piece of it.”

Rogan said he and Lexton were impressed by the amount of due diligence Endemol had done on Authentic before the acquisition talks became serious earlier this year.

“This isn’t about them coming in or changing the way we do business,” Rogan said. “They’re looking to build partnerships with numerous companies around the world. Based on the way things are going in the industry it will be nice to have that kind of backing behind us.”

Among Authentic’s upcoming shows is “Bidder Rivals,” set in an Atlanta auction house, set for an October bow on Discovery Channel.

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