If France’s Banijay Group clinches its proposed purchase of Endemol Shine, which could happen within the next few days, the deal would mark peak M&A in the international indie content world. The MO of both companies is acquiring and aggregating brands and IP, and their union would be the largest ever of its kind on the international scene.
Banijay is the Paris-based company behind “Versailles,” the Ryan Reynolds-produced gameshow “Don’t,” and “Keeping Up With the Kardashians.” Endemol Shine, itself the product of a previous merger, is the well-known purveyor of “Big Brother,” “Masterchef” and “Peaky Blinders.” A combined Banijay-Endemol Shine would take consolidation to another level, creating a super-indie (in the sense that it is not part of the Hollywood studio system, and despite some backing from French media giant Vivendi) that would boast content businesses throughout Europe and a presence in Asia Pacific, Australasia, and the U.S.
“We’ve seen consolidation among the mega-groups at a content and infrastructure level,” such as Disney-Fox and AT&T-Time Warner, said Ampere Analysis research director Guy Bisson. “So the next phase in the global reorganization of the media value chain is increasingly going to be in the supplier market – the indie distributors and producers.”
Endemol Shine is currently joint-owned by Disney (which inherited it from Fox) and Apollo Global Management. Banijay was founded by Stephane Courbit and his LOV Group, together with an offshoot of Italian conglomerate De Agostini.
Endemol Shine has about 60 production businesses and banners around the world, and 120 labels if you factor in sub-brands and sub-banners. Banijay has more than 50.
Endemol Shine is stronger in the U.K., while Banijay has a deeper bench in France, given its Gallic roots. The two companies are fairly evenly matched in the Nordics and elsewhere, with the exception of Latin America, where Endemol Shine has a handful of businesses and Banijay none.
The connections between the two companies run deep. Banijay Studios North America is helmed by David Goldberg, the former CEO of Endemol North America. Courbit himself is a former head of Endemol France. Banijay CEO Marco Bassetti founded Endemol Italy, and went on to become COO and CEO of the Endemol Group before its merger with Shine in 2014.
“Buying Endemol has been Stephane Courbit’s goal from the start,” a source close to Banijay told Variety. “He knows the company inside out. It’s a complementary alliance, especially in the U.K., Australia and the U.S., where Endemol Shine is much better established, especially on the scripted side.”
The deal for Endemol Shine is expected to be worth about $2.2 billion, which includes about $1.95 billion in debt. Banijay had a turnover of $923 million in 2018 and has its own debt of $486 million, which means that it cannot deficit-finance the deal but will instead need a capital increase from its shareholders, said Jean-Baptiste Sergeant, an analyst at MainFirst Bank in Paris. That would include investment from Vivendi in proportion with its 31.4% stake in Banijay, and from the French holding company Fimalac, which owns a 6% stake in LOV.
“The next phase in the global reorganization of the media value chain is increasingly going to be in the supplier market – the indie distributors and producers” – Guy Bisson, Ampere Analysis
The value of Endemol Shine’s library and its debt load were issues for potential buyers, including Banijay. It has some huge properties, but one question has been how well the library is aging. Its major programs include “Big Brother,” which is off of U.K. screens but on air in the U.S. and returning in several territories. There are gameshows such as “Wipeout” and “The Wall” and also hit cooking format “Masterchef.” Endemol Shine had 45 formats from 13 countries traveling the world last year, which it says is more than any other studio or group. The company’s push deeper into drama has yielded “Peaky Blinders,” “Dark” and “Black Mirror.”
“The TV production business has changed a lot compared to when Endemol built its international network,” said Tim Westcott of IHS. “In those days, there was a big appetite for reality shows which fueled its growth. The trend back then was low-cost, high-volume programs. Today the focus has moved to high-end drama, and you don’t need international networks to make those drama series. It’s more about the writers, the directors, the content of the shows…
“Endemol Shine has now moved more into scripted, and Banijay will be building its scripted business with this acquisition,” Westcott said.
Banijay’s top drama titles include “Versailles” and “The Inbetweeners.” In unscripted, it has “Wife Swap” and “Don’t,” which has been picked up by ABC. It has also bought the IP to the classic “Castaway,” “Temptation Island,” and “It’s a Knockout” properties. Banijay’s U.S. banners include “Kardashians” producer Bunim/Murray Prods., Stephen David Ent. and its own Banijay Studios North America.
Endemol Shine officially has a 63,000-hour library, although recent estimates suggest that it’s now nearer 66,000 hours. That’s three times the size of Banijay’s, estimated at 22,000 hours. Their combined catalogue would eclipse that of either BBC Studios or ITV Studios in terms of size.
“Banijay is financially healthy, and with Endemol Shine they will become a bigger player on par with ITV [Studios] and BBC [Studios], and they’ll have way more leverage to negotiate with platforms,” the source close to Banijay said.
Both sides have established sales divisions. With long-serving Cathy Payne stepping down from atop Endemol Shine Intl., Banijay Rights boss Tim Mutimer, who earned his spurs at the BBC and ITV, would be in prime position to head a unified sales business. But potentially heavy job losses would be likely among the sales troops on the ground, similar to what happened following the Disney-Fox and Comcast-Sky mergers.
Banijay’s Bassetti has been one of those driving the company’s pursuit of Endemol Shine, as well as its wider expansion. As the CEO of the acquiring company, the former Endemol man is expected to have a key role if a deal gets over the line. His counterpart at Endemol Shine, Sophie Turner Laing, is one of the most experienced execs in the international business. How the executive suite looks post-merger will depend on how the business is structured.
With a huge multi-genre library and production firepower across genres and continents, Banijay-Endemol Shine would be as much about serving the Hollywood majors as they go direct-to-consumer as about competing with them, Ampere’s Bisson said.
“It was interesting that Robert Greenblatt said last week that WarnerMedia is on a massive acquisition spree for HBO Max,” Bisson said. “There is clearly a big need for more content supply, even to the majors. That supply is increasingly global and moving beyond drama and scripted to entertainment and reality.”