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Time Warner makes play for Endemol, to boost overeas presence

November 4, 2011 |  4:27 pm

Looking to boost its international presence, Time Warner Inc. made a unsolicited bid earlier this week for Endemol, the creator of reality TV hits “Deal or No Deal” and “Wipeout” and one of the world’s largest television production companies.

The media giant and parent of Warner Bros. has offered about $1.4 billion for the highly leveraged Endemol, according to a person with knowledge of the bid. Time Warner is interested in the company because it can provide a steady stream of product to its channels around the globe.

“We have received an approach from Time Warner, which doesn’t come as a surprise,” said Charlie Gardner, a spokesman for Endemol.

However, Gardner said, Amsterdam-based Endemol is committed to resolving its balance sheet issues. The company carries a debt load of about $2.75 billion, Gardner said.

“This doesn’t change anything. We remain focused on reaching a solution with lenders,” Gardner said, adding: “We are confident that an agreement will put the business on a firm financial footing and strengthen Endemol’s prospects for the future.”

In the United States, Endemol is best known as a producer of reality and game shows including CBS’ “Big Brother” and NBC’s “Fear Factor.” It also produces numerous reality shows for cable, such as TLC’s “LA Ink” and Bravo’s “The Rachel Zoe Project.”

Founded in 1994 by John De Mol and now owned by the investment firm Goldman Sachs and investment funds Cyrte and Mediacinco –- controlled by Italian Prime Minister Silvio Berlusconi -- Endemol has gone through some internal turmoil as of late. Less than three months ago, Ynon Kreiz abruptly resigned as chairman and chief executive in the midst of Endemol’s efforts to restructure its heavy debt load. Endemol's board tapped Marco Bassetti, the company's group president, and Just Spee, the group chief financial officer, to manage the company as it tries to come to a new agreement with its debt holders.

The ongoing fight between Endemol and its creditors appears to have motivated Time Warner to make a play for the company. Besides its bid, Time Warner has also committed to investing heavily in new programming.

In Endemol, Time Warner sees a product pipeline for its international television networks. Time Warner owns entertainment channels in India, Japan, Central and Eastern Europe and Latin America.
Warner Bros. already has a lucrative business selling its library of television shows, including current hits “The Big Bang Theory” and dramas such as “The Mentalist” and “Nikita,” around the world.

But now companies such as Time Warner, Viacom and Sony are also trying to produce more local content for foreign markets instead of just dubbing their shows in various languages and shipping them overseas. Sony, for example, has produced Russian-language versions of its “The Nanny” and “Everybody Loves Raymond.”

Endemol has a library of almost 2500 program formats and produces regional versions of its shows in numerous languages, in numerous places, including the United States, Germany, France, Italy, Spain, the Netherlands, Russia, Brazil and the Middle East.

The company has recently become a player in the syndication game as well. Programs it sells abroad include the AMC cable channel hits “Mad Men” and “Breaking Bad,” the soon-to-premiere Western “Hell on Wheels” and the TV Land series “Happily Divorced.”

Although best known for its reality and game shows, Endemol has also increased its scripted programming production by about 50% in the last three years. Endemol’s scripted fare is made primarily for Holland, Italy, Spain and Australia. It also has a presence in Britain and in Argentina, where it makes telenovelas. This year, Endemol unveiled plans to build a scripted entertainment business in the United States.

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-- Joe Flint

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