In a big move to expand its overseas production operations, Warner Bros. TV Group has cut a deal to acquire the international production units of Netherlands-based Eyeworks in a deal valued at more than $273 million.
The deal, unveiled Tuesday ayem, will give Warner Bros. TV a foothold in 14 key territories across Europe, South America as well as in Australia and New Zealand. The Eyeworks USA unit will remain independent and is not included in the purchase. Television Business Intl. pegged the price tag at $273.3 million.
Warner Bros. CEO Kevin Tsujihara said: “Our proposed acquisition of Eyeworks’ 15 local production companies represents a significant next step in our strategy, further strengthening Warner Bros.’ position in global television.”
After the buyout is complete, Eyeworks Group CEO and co-founder Reinout Oerlemans will relocate to the U.S. to become chairman of Eyeworks USA, which is run by producers J.D. Roth and Todd Nelson.
Warner Bros. had been talking to Eyeworks on and off for about a year. The negotiations heated up during the past few months. The studio’s pursuit of the company — which has heft in Scandinavia, Germany, Spain, Brazil and Argentina — is just the latest sign that the U.S. majors are increasingly looking to overseas markets for growth.
“This deal is definitely about growth,” Jeffrey Schlesinger, prexy of Warner Bros. Worldwide Television Distribution, told Variety. “It’s hard to imagine us getting significantly bigger in the scripted area (in the U.S.). The one area where were can look for growth is in the unscripted market.”
Warner Bros. TV is revving its unscripted development activity under the direction of Mike Darnell, the Fox veteran who joined the studio last year. Eyeworks’ was attractive to Warner Bros. in part because it has the reach to produce localized formats of any hot properties that Darnell’s team delivers.
At the same time, WBTV is determined to become a player in highly localized production — something that can’t be done unless the studio has feet on the ground.
“As the world changes and opportunities continue to grow in many of those markets we’d like to be on the ground and produce programming for local markets,” Schlesinger said.
Ronald Goes, exec VP and head of Warner Bros. Intl. Television Production, will oversee the absorption of the Eyeworks. His division was formed in 2009 for the express purpose of establishing operating production companies around the globe.
Warner Bros. bought U.K.’s Shed Media in 2010 and BlazHoffski, a shingle active in the Netherlands and Belgium, in 2011. Time Warner, meanwhile, was rebuffed in its effort to buy out Endemol in late 2011.
One big plus for Warner Bros. in acquiring Eyeworks is the fact that the company did not have a presence in the U.K. — which meant no overlaps with Shed Media’s existing operation. And Schlesinger emphasized that the absorption of Eyeworks’ 14 operating units will be made easier by the fact that Goes and his London-based team are already in place and have experience with past integration efforts.
Launched in 2001, Eyeworks has grown quickly into a player in global TV and film production spanning a range of genres, including scripted as well as unscripted. Schlesinger noted that WB discovered as part of the due diligence process that Eyeworks is doing solid business in Scandinavian territories with scripted series and feature films. He called it “extra icing on the cake” for the deal, given that the region has become a big exporter of books and formats to Hollywood in recent years.
The Eyeworks assets fill in a lot of holes on the map for WBTV, but the studio will still be in the market for selective acquisitions in major territories such as France, Schlesinger said.
The timing of the deal is not surprising. The market for production company assets is red-hot at the moment — witness the recent $100 million-plus sale of L.A.-based Magical Elves to U.K.’s Tinopolis Group.
Oerlemans clearly saw an opportunity to cash out and yet maintain an autonomous perch at the growing U.S. division. Eyeworks USA will maintain an international distribution pact with the Eyeworks mothership operation even after the deal closes.
“It’s fair to say that it got me thinking when Warner Bros. showed the strong interest in Eyeworks,” Oerlemans said. “For Eyeworks, this is a defining step towards our ongoing objective to be a major player in content production around the globe. … I know Ronald Goes will be a tremendous leader for this fantastic group of talented people going forward.”
Eyeworks’ planted its flag in the U.S. with its 2006 acquisition of J.D. Roth and Nelson’s 3 Ball Prods., known for “The Biggest Loser,” “Beauty and the Geek” and other unscripted hits. The wing’s current roster includes ABC’s “Extreme Weight Loss” and Spike TV’s “Bar Rescue.”
J.D. Roth and Nelson have worked with closely with Oerlemans on cross-company projects during the past few years. Eyeworks USA’s other senior execs, including COO Ross Weintraub and prexy Brant Pinvidic, will remain at the helm under the new boss.
Oerlemans’ “expertise in creating content for the global stage is unmatched, and we are excited for this next iteration of Eyeworks USA,” J.D. Roth and Nelson said.