×
You will be redirected back to your article in seconds

MipTV: Europe Catches Media M&A Fever

Private equity giant KKR has been on an acquisition tear in Germany. Comcast scooped up Sky in a dramatic bidding battle last year. John Malone’s Liberty Global is poised to be flush with cash later this year if the company’s $22 billion sale of cable operations in Germany and Eastern Europe to Vodafone is approved by regulators.

The U.K.’s ITV and France’s Canal Plus are among the marquee media assets in Europe that are seen as potential acquisition targets or potential buyers. It’s clear that the M&A fever that has gripped the largest U.S. conglomerates has spread across the Atlantic.

“Now more than ever, Europe needs strong competition from scaled national challengers willing and able to invest in next-generation wireless, video and broadband services,” Liberty Global CEO Mike Fries said in May when the Vodafone sale was announced.

Europe has long been less concentrated when it comes to media ownership, in part because the privatization push for the television industry only began in the 1980s in many markets. But Europe is feeling the gyrations of disruption as Netflix and other multinational outfits have planted roots in the region.

“With Disney and Apple entering the global market for content in a serious way, there have to be larger entities to compete with them,” says Thomas Dey, president and CEO of ACF investment bank. “I think everybody is recognizing that to compete, you’re going to have to be big or become obsolete.”

As the streaming wars go global, media giants are jockeying for advantage by scooping up content and distribution assets. The rapid growth of the streaming market has also helped put the spotlight on production companies that might not have been on the radar before. To wit, Dey points to the success of Italian drama series “Gomorrah” bringing new attention to Italy’s long-established Cattleya production company. ITV bought a majority stake in Cattleya in late 2017.

“The portability of content has made local distinctions less relevant,” says Sean Cohan, president and chief business officer for Wheelhouse Entertainment, who previously headed international operations at A+E Networks. “Making German content that can travel around Europe via Netflix or Amazon makes it a lot more interesting to combine production assets in multiple territories.”

In February, KKR swooped on two big media players in Germany inside of a week: Tele Munchen Group, the independent film and TV production-distribution outfit, and film distributor Universum.

The acquisitions are designed to help KKR build what it has described as “a large independent German content platform.” KKR made a point of expanding its presence in Germany by opening a Frankfurt office for the first time last year. Fred Kogel, a Euro entertainment veteran who has held top posts at Germany’s ZDF, Kirch Media and Constantin Film, has been tapped to lead the venture that will consolidate Tele-Munchen, Universum and presumably other acquisitions.

Philipp Freise, head of the European technology, media and telecommunications industry team at KKR, says the private equity giant’s goal is “to build something new in the film and TV business: A platform that covers the entire value chain from film set to cinema and TV and which we will build out further through acquisitions.”

KKR sees the fragmentation of disciplines in media as an opportunity in Germany and other markets to create what executives call Germany’s “go-to” company for creative talent.

Comcast is betting big on growth in Europe through its $40 billion acquisition of Sky. The U.S. cable giant fought off 21st Century Fox and Disney last year in a dramatic bidding process that culminated last September. A revved-up Sky will surely be a competitor and potential partner to KKR’s ambitions in the German market. Sky at present serves the U.K., Ireland, Germany, Austria and Italy.

Comcast went after Sky in part because it desperately wants to diversify its revenue base, which is largely rooted in the U.S. Sky’s core business is one that Comcast knows well — selling cable and Internet packages to consumers. But Sky also has potential to serve as a crucial component of the streaming packages that Comcast hopes to launch in 2020, starting in the U.S.

Sky is “a truly unique company that combines a direct-to-consumer business similar to Comcast Cable, with brands and content ownership economics like we have at NBCUniversal,” Comcast chairman-CEO Brian Roberts said during Comcast’s quarterly earnings call in January. “Sky operates in significantly underpenetrated markets and has terrific long-term growth ahead of it, including the potential to expand into new markets.”

Dey, of ACF, sees the entry of U.S. majors a la Comcast and private equity giants such as KKR as a signal that “provincialism” in European media is soon to give way to consolidation among players with visions that span borders.

“Anyone who doesn’t adapt will be run over in the process,” Dey predicts. “I think that this will happen at a tremendous pace in the next three years.”

More TV

  • Crazy Rich Asians

    Singapore Sees Rise in Co-productions, Competes for Foreign Projects

    As Singapore’s stature continues to grow in the entertainment world, and with international producers forever on the lookout for exotic but affordable locations, the Asian country is once again in global sights as a major production hub. Singapore’s distinctive topography of cityscapes and countryside, coupled with its unique cultural blend of East and West, has [...]

  • Charlie Corwin and John Penotti SK

    S.K. Global Makes Mipcom Debut With 'Crazy Rich Asians' Under Its Belt

    “To me, it wasn’t like, ‘Oh, maybe we should wake up one morning and try something different. How about we try television?’” John Penotti, producer-financier and co-founder of GreeneStreet, one of New York City’s more long-lived independent film companies — it was acquired in 2013 after 16 years — is explaining just how he ended [...]

  • singapore Skyline

    Netflix, HBO, Other Global Content Creators Set Up Asian Bases in Media-Friendly Singapore

    Netflix runs its Asian operations from the swanky Marina One mixed-use development in Singapore, an architectural masterpiece that fits in with the streaming giant’s dedication to Instagrammable real estate. Netflix’s presence in Singapore follows other major media names over the years, including HBO Asia, Vice Media and HOOQ, all of whom have Asian headquarters in [...]

  • Sidney Kimmel film financier

    Television — Sidney Kimmel's Next Act Bows at Mipcom

    During the course of his 91 years, Sidney Kimmel has accomplished a lot. That includes making a few videos for web series “Old Jews Telling Jokes.” “John’s fault,” he says. “He dragged me over there and said, ‘You’ll get a free drink and a dinner out of it.’” John is independent movie producer-financier John Penotti, [...]

  • The Outpost -- "One is the

    Electric Entertainment Launching OTT Channel Electric Now (EXCLUSIVE)

    U.S.-based producer and distributor Electric Entertainment is launching Electric Now, a linear OTT channel that will feature its top series and library content. The channel will have episodes of “The Outpost,” the fantasy-adventure series that has just had its third season greenlit by U.S. network The CW. The new season will head into production in [...]

  • American dollars bills and coinsAmerican cash,

    Entertainment Biz Comes Under Fire for Assistants' Low Wages, Working Conditions

    It’s no secret that many assistants in Hollywood bear heavy workloads for low pay. But the entertainment industry’s labor practices when it comes to those workers have now become the subject of intense social-media scrutiny. TV writer and WGA board member Liz Alper shone a light on the issue Monday with the creation of the [...]

  • Megyn Kelly

    Tucker Carlson Plans Megyn Kelly Interview on Fox News Channel

    Megyn Kelly is returning to Fox News Channel – briefly. Tucker Carlson has scheduled an interview Wednesday with the former Fox News and NBC News anchor, who will make her first appearance on her former employer’s programming since leaving in early 2017. The “Tucker Carlson Tonight” segment would also mark Kelly’s first appearance on a [...]

More From Our Brands

Access exclusive content