You will be redirected back to your article in seconds

Congloms chase big footprint

NATPE 2012

Time Warner’s pursuit of Netherlands-based reality powerhouse Endemol has media analysts asking a big question: Are other major media congloms looking to make similar deals?

The answer: Beyond this example, there aren’t many sizable reality TV production companies available. But the goal remains the same for many U.S.-based media companies like Time Warner — grabbing market growth from international expansion. News Corp., Sony and NBCUniversal in particular have invested significant bucks in expanding their production-distribution footprint in key growth territories, like Latin America and Asia.

David Joyce, media industry analyst for Wall Street brokerage Miller Tabak + Co., says for Time Warner the proposed $1.3 billion cash deal could quickly expand its presence in the reality genre to some 30 countries where Endemol operates. Endemol’s big U.S. shows have been “Big Brother” on CBS, “Deal or No Deal” on NBC and “Extreme Makeover: Home Edition” on ABC.

Time Warner has also been said to be in pursuit of Turkish TV/media group Sabah-ATV.

“Time Warner has been actively growing its international operations,” says Joyce, adding that it has also taken a stake in another producer and broadcaster, Central European Media Enterprises (CME).

Time Warner has been a big provider of scripted comedies and dramas for years — typically expensive TV programming.

“They can bump up the number of (reality) series with little financial cost or risk,” says Thomas Dey, CEO of U.K.-based About Corporate Finance, which does investment banking for media companies.

Additionally, Time Warner could also quickly gain a foothold in the big international area of format deals for reality shows. Warner Bros. TV has been expanding in the unscripted arena in recent years through its Warner Horizon division.

“It is not all that different than when Coke and Pepsi got into the water (product) game,” says Chet Fenster, managing partner and director of content creation for media agency Group M’s MEC Entertainment.

Reality shows can provide key access to local networks around the world for big media companies. Fenster says, for example, Endemol controls about 3,500 reality show formats. While most won’t see the light of day, he says when partnering with local TV production companies on even one or two well-rated shows, Endemol gains leverage with many local TV networks and stations.

Financially, it’s important to move now. “Reality TV budgets are rising,” Fenster says.

In 2010, Time Warner bought a 55% stake in U.K.-based Shed Media, producer of “Supernanny,” which aired in the U.S. on ABC.

Earlier this year, Electus, the Ben Silverman company owned by IAC, bought Engine Entertainment to establish an inhouse global TV distribution arm.

Deals in 2011 included News Corp.’s $674 million acquisition of Shine Group, run by Rupert Murdoch’s daughter Elisabeth. At the time, Shine was the sixth-largest TV production company in the U.K. A couple years ago, Shine bought Reveille, Silverman’s former company, which produces “The Biggest Loser” for NBC.

Early last year, Hearst Corp. bought a 50% stake in reality producer Mark Burnett Prods., producer of CBS’ long-running “Survivor” series as well NBC’s “The Voice” and “Celebrity Apprentice.” With that in mind, Dey anticipates upcoming companies that generate a modest cash flow in the $50 million to $100 million per year range might be good bets for acquisition — especially if in the earlier stages of growth. “Many of these reality show ideas come from creatives at small production companies.”

Here’s another reason to consider small reality TV companies: Many have direct dealings with advertisers and marketers for branded integration deals on the likes of “The Biggest Loser” and “Big Brother,” earning extra revenue. “Brands can get a lot more attention at smaller companies,” says Fenster.

Aside from format deals and financial stakes in local TV production companies, big media may be looking to buy creative talent — but those creatives may not stay for long.

“The cultural differences can be huge,” says Gary Lico, president-CEO of Cable Ready, which sells U.S. programming internationally. He adds that many small TV companies can be quicker in making programming deals, not always possible as a part of a bigger media company.

While reality show producers have been hot prospects — gaining revenue on international format deals — they continue to suffer when it comes to selling shows as part of library program deals: Reality episodes don’t have much afterlife.

“These business are fundamentally hit-driven,” says Laura Martin, senior analyst of entertainment, cable and media for Needham & Co. “You need constant cash flow. If they don’t have one for a long time, you run out of money.”

NATPE 2012
Congloms chase big footprint | Syndie concerns grow as daytime yakkers stack up | Distribs, stations guard firstrun syndie shows from web | Worthy successors | What’s coming to market | Comedies hit syndie paydirt — for now |

More TV

  • Mel Robbins - Season 1 -

    'The Mel Robbins Show' Picked Up for Fall Debut in Syndication

    Sony Pictures Television announced Tuesday that “The Mel Robbins Show,” its new one-hour syndicated talk show, has been picked up by Nexstar Media Group. The show will be hosted by author and speaker Mel Robbins. It will debut in syndication on Sept. 16 and clear 90% of U.S. television households. The list of station groups [...]

  • Ken Kercheval dead

    Ken Kercheval, Cliff Barnes on 'Dallas,' Dies at 83

    Ken Kercheval, who played oil tycoon Cliff Barnes, the rival of Larry Hagman’s J.R. Ewing on “Dallas,” has died. He was 83. A spokeswoman at Frist Funeral Home in Kercheval’s hometown of Clinton, Ind., confirmed his death on Wednesday to Variety, but did not provide additional information. Kercheval and Hagman were the only two stars who [...]

  • The CW Renews ‘All American,’ ‘The

    The CW Renews ‘All American,’ ‘The 100,’ ‘In The Dark’ and ‘Roswell, New Mexico’

    The CW has announced a flurry of renewals. Three of the network’s freshman shows, “All American,” “Roswell, New Mexico” and “In The Dark,” will return for second seasons, as well as “The 100,” which gets a seventh outing. This means that all five of The CW’s first-year shows, including the previously-renewed “Legacies” and “Charmed,” have [...]

  • Gael Garcia Bernal

    Showtime Announces Cast for Gael Garcia Bernal, Jonas Cuaron Pilot 'Hombre'

    Showtime has revealed who will be joining “Mozart in the Jungle” star Gael García Bernal in the upcoming Jonas Cuarón pilot “Hombre,” which deals with undocumented immigrants. Marisé Alvarez, Greg Grunberg, Pepi Sonuga, Adriana Santos, and Noah Reyes have all been cast in the pilot, which is set to begin production at the end of [...]

  • Gil L Robertson IV and Shawn

    African American Film Critics Association Announces Inaugural TV Honors Awards Show

    The African American Film Critics Association will host the first-ever AAFCA TV Honors awards show to celebrate outstanding achievement in the field. The inaugural event will take place as a luncheon on Aug. 11 at the California Yacht Club in Marina Del Rey and present awards in seven categories. Winners will be announced on June [...]

  • Jedediah Bila Named Co-Host 'Fox &

    Jedediah Bila Named Co-Host 'Fox & Friends Weekend'

    Fox News Channel named Jedediah Bila a co-host of its weekend broadcast of “Fox & Friends,” giving the contributor a wider platform on the cable-news network. Starting this Saturday, Bilahwill join co-host Pete Hegseth, along with a rotating third co-host, on the morning program. “Jedediah’s thoughtful analysis and endearing personality have cultivated a connection with [...]

  • True Crime Illustration

    Inside the True Crime Boom Taking Over Prestige TV

    In 2016, the first season of Ryan Murphy’s “American Crime Story,” about the arrest and trial of O.J. Simpson, swept the Emmys’ limited-series categories, sparking a revival in mainstream interest in both the Simpson case and the true-crime genre. Ever since then, crime stories — American and otherwise — have been multiplying. It’s a boom [...]

More From Our Brands

Access exclusive content