Rachel_Sandford
News Hound
Endemol, the media company that owns Deal or No Deal, Money Drop, Total Wipeout, and Big Brother, is deeply in debt. About £1.77bn of it! Last year, the company earned roughly €140m before amortisation, depreciation, interest, etc., and while it should make more this year, it's still in a precarious situation. The fact that its chief executive, Ynon Kreiz, stepped down in June, and the company hasn't been able to find a new one since, (Charles Allen, former ITV chief executive has been the non-executive director in the meantime) reveals their distressing situation.
Salvation may come for Endemol, however. Rumor has it that ITV is trying to buy Endemol. Acquiring the company fits ITV's five year strategy of owning more intellectual property rights, boost new formats, and broaden their global reach. According to sources, they've been looking into possible acquisitions. All3Media, which is owned by Permira would cost them £750m and not do enough for their goals; and Freemantle Media, owned by RTL, is also too expensive. It only leaves the Zodiak Media Group as an alternative. Endemol is much more enticing, though.
“Endemol owns formats that drive broadcasters around the world. ITV Studios could use those as Trojan horses for its other formats,” said a source.
However, to acquire Endemol, ITV would have to take on Endemol's debt, part of which is owned by Mediaset, Goldman Sachs Capital Partners, and Cyrte Investments, all of whom have a stake in Endemol. This means that they'd have to work out a pretty complex deal. One option, which is rumored to already be underway, would be to enter a joint venture with Italian Prime Minister, Silvio Berlusconi, who partly owns Mediaset. Another option could require getting Endemol co-founder, John de Mol, to return as executive chairman or chief executive of the company, linking it to de Mol's current company, Talpa Media.
Liberum Capital analyst, Ian Whittaker said: “The strategic rationale definitely makes sense. The problem will be the debt and how such a deal might be structured.”
The question is, can ITV take it on? Given the broadcaster's summer slump and possible advertising turn downs, plus predictions that advertising revenues will fall another 5% this Christmas, it may not be able to acquire a company that is worth €1.5bn, debt included. It may be able to, if it borrows money, but would that be feasible in the long run?
At present, ITV has declined to give a statement on the matter. Mediaset is also yet to issue a statement.
Salvation may come for Endemol, however. Rumor has it that ITV is trying to buy Endemol. Acquiring the company fits ITV's five year strategy of owning more intellectual property rights, boost new formats, and broaden their global reach. According to sources, they've been looking into possible acquisitions. All3Media, which is owned by Permira would cost them £750m and not do enough for their goals; and Freemantle Media, owned by RTL, is also too expensive. It only leaves the Zodiak Media Group as an alternative. Endemol is much more enticing, though.
“Endemol owns formats that drive broadcasters around the world. ITV Studios could use those as Trojan horses for its other formats,” said a source.
However, to acquire Endemol, ITV would have to take on Endemol's debt, part of which is owned by Mediaset, Goldman Sachs Capital Partners, and Cyrte Investments, all of whom have a stake in Endemol. This means that they'd have to work out a pretty complex deal. One option, which is rumored to already be underway, would be to enter a joint venture with Italian Prime Minister, Silvio Berlusconi, who partly owns Mediaset. Another option could require getting Endemol co-founder, John de Mol, to return as executive chairman or chief executive of the company, linking it to de Mol's current company, Talpa Media.
Liberum Capital analyst, Ian Whittaker said: “The strategic rationale definitely makes sense. The problem will be the debt and how such a deal might be structured.”
The question is, can ITV take it on? Given the broadcaster's summer slump and possible advertising turn downs, plus predictions that advertising revenues will fall another 5% this Christmas, it may not be able to acquire a company that is worth €1.5bn, debt included. It may be able to, if it borrows money, but would that be feasible in the long run?
At present, ITV has declined to give a statement on the matter. Mediaset is also yet to issue a statement.
