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Mediawan, the KKR-backed French tv and movie manufacturing group behind Call my Agent, has agreed to accumulate a German rival owned by the identical buyout group, in an indication of how sector consolidation is accelerating to feed the urge for food of streaming video platforms.
The all-share deal, which values Germany’s Leonine at about €500mn, additionally signifies a deepening of the co-operation between KKR and Mediawan, whose founders embrace French telecoms billionaire Xavier Niel and TV producer Pierre-Antoine Capton.
The non-public fairness group invested in Mediawan’s deal to de-list its shares from the Paris market in 2020. At that point, KKR grew to become a giant shareholder in Mediawan whereas the French group took a 25 per cent stake in Leonine.
Capton, Mediawan’s CEO, mentioned it was the appropriate time for the businesses to merge as a result of European laws had been phasing in to require streaming platforms resembling Netflix, Amazon’s Prime Video and Disney+ to spend extra on regionally produced reveals.
“After France, Germany will next year become the second country to apply the EU directive to boost local content so it makes strategic sense to do this and work with Leonine to develop more premium content for streaming platforms,” he advised the Financial Times.
Philipp Freise, KKR’s co-head of European non-public fairness, mentioned the fund would proceed to again Mediawan and anticipated it to do additional acquisitions. “Together we have created the largest independent content production company in continental Europe. A next phase now begins with more deals to come to consolidate the space.”
Streaming platforms have these days been slowing their tempo of spending on content material globally as they shift focus to profitability over subscriber progress. The dynamic has put stress on smaller producers, with some selecting to promote up and be a part of bigger teams resembling Mediawan, to be in a greater place to win commissions.
Capton mentioned that Mediawan had skilled little influence from the streaming platforms slicing again, and pointed to Netflix’s latest disclosure that it now had extra subscribers in Europe than within the US. “Streaming platforms are not necessarily spending less but they do want to spend better, meaning on fewer, higher quality shows,” he mentioned.
Mediawan was based in 2015 by Capton, Niel and funding banker Matthieu Pigasse, as a special-purpose acquisition car listed in Paris. The group, which additionally produced the sequence One Day, which was streamed on Netflix, has expanded steadily by snapping up small or mid-sized manufacturing homes in France after which throughout Europe.
It entered the US in late 2022 by shopping for Brad Pitt’s Plan B Entertainment, an acclaimed Hollywood producer identified for films together with Moonlight and Money Ball and extra not too long ago the hit Netflix science fiction present Three-Body Problem.
Leonine was based in 2019 with KKR’s backing and has since been shopping for up manufacturing homes in Germany. It backed movies resembling The Lives of Others and Netflix’s Dark and owns the German-language rights for blockbuster franchises together with John Wick.
Once mixed with Leonine, Mediawan could have about €1.3bn in annual revenues, in contrast with beneath €400mn when it went non-public in 2020.
It has benefited from an EU directive adopted in 2018, step by step utilized in member states, that requires a minimal 30 per cent of European works within the catalogues of streaming providers. France went additional in an effort to spice up their cultural industries, and has required huge international streamers to speculate no less than 20 per cent of their French turnover in European productions.
“We want to keep expanding in Europe, such as in the Nordics, and elsewhere where we are not as present, such as Africa where there is a lot of talent and opportunity,” mentioned Capton.