RTL Group explores options for TV production arm Fremantle, sources say

Bertelsmann SE & Co KGaA

29/10/2024 13:32

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      Fremantle has been valued at up to 1.9 billion euros
    

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      RTL says Fremantle is one of its 'strategic priorities'
    

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      Talks are at an early stage, no deal certain, sources say
    

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      End of 'peak television' boom could drive consolidation
    

  
    By Amy-Jo Crowley
       LONDON, Oct 29 (Reuters) - RTL Group  AUDK.LU , Europe's
largest broadcaster, is exploring options for its Fremantle
production unit, including a merger, given a broader cutback in
TV commissioning across the industry, two people familiar with
the matter told Reuters.
    RTL, majority-owned by German media group Bertelsmann
 BTGGg.F , is considering finding a merger partner for the "Got
Talent" franchise owner, which could involve selling a minority
stake to another production group or private equity firm with
production assets, the sources said. It wants to retain majority
control of the business, the sources added. 
    Fremantle, whose hits include drama "Normal People", has
been valued at around 1.9 billion euros ($2.05 billion),
according to analyst reports. 
    The sources, who requested not to be identified because the
matter is private, said deliberations were in the early stages
and no deal was guaranteed.
    A spokesperson for RTL said in an emailed statement that
expanding its global content business Fremantle, "is one of RTL
Group’s strategic priorities – as evidenced by the series of
recent acquisitions," and declined to comment further.     
    Fremantle's acquisitions this year include French production
group Asacha Media Group and Singapore's Beach House Pictures. 
    Bertelsmann referred requests for comment to RTL.
    Inflation and a downturn in advertising hit traditional
broadcasters' production budgets, while the boost from streaming
services has started to fade as the industry emerges from a
bumper period of high-quality commissioning analysts have
labelled as "peak television".
    The amount spent on commissioning by UK-based broadcasters
fell by more than 10% last year, according to industry body
Pact.
    The cutbacks have prompted production companies to look at
consolidation to cut costs and pool resources, the people said.
    Logical partners for Fremantle could include RedBird IMI,
which acquired All3Media earlier this year for 1.15 billion
pounds ($1.49 billion), and private equity firm Providence, the
first person said. Providence, which declined to comment, is a
shareholder in North Road Company, formed by Hollywood veteran
Peter Chernin. A spokesperson for RedBird IMI declined to
comment. 
    However, potential bidders may want majority control of
Fremantle, which could be a stumbling block to a deal, the first
person said.   
    Fremantle is one of the largest producers of scripted and
unscripted shows, providing for a variety of broadcasters and
streamers worldwide including ITV, Amazon and Disney.
    Revenue at Fremantle decreased to 957 million euros in the
first half of 2024, according to its latest results. It is
targeting full-year revenue of 3 billion euros by 2026 by
investing across entertainment, drama and film, and
documentaries organically and via acquisitions.
($1 = 0.9280 euros)
($1 = 0.7710 pounds)

 (Reporting by Amy-Jo Crowley with additional reporting by
Mathieu Rosemain and Paul Sandle. Editing by Anousha Sakoui and
Barbara Lewis)
 ((amy-jo.crowley@thomsonreuters.com))