×

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

  • 'Game of Thrones' Cast Address Final

    'Game of Thrones' Cast Address 'Media-Led Hate Campaign' at Comic-Con

    What is life like now after “Game of Thrones?” That’s the question that fans have been asking themselves and that cast members had to answer at the show’s final Comic-Con panel. But first, Conleth Hill, Nikolaj Coster-Waldau and several others cleared the air and addressed the perceived negative response to the final season. “I don’t [...]

  • SDCC Roundup: AMC Drops 'The Walking

    SDCC TV News Roundup: AMC Releases 'The Walking Dead' Season 10 Trailer (Watch)

    San Diego Comic-Con has become a hotbed of entertainment news in recent years, especially for the television industry. In today’s SDCC TV news roundup, AMC dropped a trailer for the 10th season of “The Walking Dead” and FX released a first look at “Mayans MC” Season 2. FIRST LOOKS AMC debuted the trailer for Season [...]

  • ARCHER: 1999 -- "Cubert" -- Season

    'Archer' Renewed for Season 11 at FXX

    “Archer” has been picked up for an eleventh season. The announcement was made Friday at San Diego Comic-Con. The news comes less than a week ahead of the Season 10 finale. Season 11 is slated to debut on FXX in 2020. While the show initially focused on the agents and support staff of a covert [...]

  • Carnival Row

    Amazon Debuts New 'Carnival Row' Footage at Comic-Con (Watch)

    San Diego Comic-Con attendees got an extended look at the upcoming Amazon drama “Carnival Row” during the show’s panel at the annual fanfest on Friday. Two new featurettes (see above and below) offer in-depth looks at the backstories of the two main characters — Vignette Stonemoss (Cara Delevigne) and Rycroft Philostrate (Orlando Bloom). Delevigne plays [...]

  • Emmys: 'Better Call Saul' Short Loses

    'Better Call Saul' Short Loses Emmy Nominations in Light of Category Rule Violation

    Better Call AMC: Two Emmy nominations for the network’s short-form series “Better Call Saul Employee Training: Madrigal Electromotive Security” have been pulled after it was deemed ineligible for competition. The Television Academy recently discovered that the series didn’t meet the minimum required runtime of two minutes for at least six episodes — a new stipulation [...]

  • The Boys Amazon Prime

    ‘The Boys’ Lands Early Season 2 Renewal at Amazon

    Amazon has renewed “The Boys” for a second season ahead of the show’s series premiere next week. The streamer also announced that Aya Cash will join the show in the second season. Season 1 of “The Boys” will debut on July 26. It is based on the New York Times best-selling comic of the same [...]

  • Variety Cord Cutting Placeholder Cable

    Big Blackout Looms as CBS, AT&T Go Down to Wire on Renewal Talks

    A blackout affecting CBS stations in major markets throughout the country looms as CBS and AT&T executives go down to the wire on negotiations for a retransmission consent deal covering 28 O&O stations. The sides have sparred publicly during the past few days as 11 p.m. PT Friday expiration of the previous contract approached. AT&T [...]

More From Our Brands

Access exclusive content