Banijay-All3Media-merger-Traitors-Black-mirror-Marco Bassetti

Banijay Entertainment was already the largest independent television producer in the world. So it decided to get bigger.

Banijay’s mega-merger with fellow indie giant All3Media, completed this week, creates a true TV colossus. The new London-based production and distribution group brings together nearly 200 production companies and labels across 25 territories, including the companies that make and sell such shows as The Traitors, Big Brother, Survivor, MasterChef, Peaky Blinders and Black Mirror, some hundreds of thousands of hours of programming, and combined revenues of $8.5 billion.

Coming fast on the heels of the $2.1 billion offer by Comcast-owned Sky to acquire British commercial network ITV, the Banijay-All3Media deal is a further sign that traditional TV is scaling up in an effort to survive, perhaps even thrive, in a rapidly changing digital marketplace.

Banijay CEO Marco Bassetti is betting not only that the company can again scale up, as it’s done with previous acquisitions — of Zodiak Media in 2015 and Endemol Shine in 2019 — but also that it can maintain its still highly profitable TV business while extending and expanding its reach into live events, sports and across social media. Speaking to The Hollywood Reporter shortly after completing the deal, Bassetti outlined his plans to grow Banijay while holding on to the “entrepreneurial DNA” that has defined its success to date. “We have to preserve the flexibility that defines our company. Our industry changes constantly. We have to keep adapting.”

Banijay was already the world’s largest independent TV producer. Why did you need to get even bigger?

It was never about simply becoming the biggest. Our ambition is to create the best home for creative talent — a place where producers can better monetize their intellectual property, distribute it around the world, remain independent, and feel supported. That has always been our goal.

All3Media was highly complementary to Banijay. The U.K. is Europe’s largest television market and one where we wanted to strengthen our presence. By bringing the two groups together, we can offer All3Media’s producers access to a much larger international footprint and more opportunities to maximize the value of their IP. That’s the logic behind the deal.

Even if scale wasn’t the primary objective, it clearly matters. What advantages does scale bring in the market today?

Scale is increasingly important because our industry remains fragmented. But it’s important to understand what Banijay actually is. We don’t operate as one centralized production company. We’re a federation of creative businesses that retain enormous autonomy. We don’t tell producers which broadcaster to work with or what genres to make. They remain entrepreneurial. Our job is to support them — with financing, market intelligence, distribution, investment and by helping them retain ownership of their IP.

Size allows us to provide those services. With our global distribution business and a catalogue of more than 260,000 hours, we can give shows a much longer life internationally. We can negotiate better deals, both for our own companies and for third parties who use our distribution arm. We can monetize content through digital platforms, FAST channels and social media, and we can invest in IP we believe has long-term value. Scale isn’t the goal in itself. It’s what enables us to better serve creative talent.

Does that mean it’s becoming increasingly difficult for smaller independent producers to survive?

I think it’s harder today to remain independent on your own than as part of a group like ours. The people who join Banijay generally stay because they retain their independence while gaining access to services they couldn’t build themselves. We support them in good times and bad.

Being part of a larger group also creates opportunities. Formats travel between countries. Producers share ideas and best practices. Successful formats generate royalties across the network. Those advantages are much harder to achieve as a standalone producer in today’s market.

One thing that stood out about the merger was how modest the projected cost synergies were. You’re projecting “just” €50 million ($57 million) in savings there. That suggests this isn’t a deal driven by job cuts.

That’s right. The businesses are complementary rather than overlapping. All3Media brings strengths we didn’t have, including [All3Media’s social media agency and digital production company] Little Dot Studios, which gives us a much stronger digital and social media capability. The U.K. business also significantly strengthens our position in the English-speaking market.

The efficiencies we’re targeting come from procurement, real estate, insurance and support functions — not from cutting producers or creative teams. The whole purpose of the merger is to bring together creative talent and preserve the IP they’ve built. That’s why the announced synergies are relatively modest.

Where do you see the biggest opportunities for growth now that the merger is complete?

There is still growth in our traditional production business if we become even better at exploiting our IP globally. But the biggest opportunities go beyond television production.

We’re investing in extending our brands into live experiences, gaming and immersive entertainment. We’re launching theatre productions, we’ve developed a Black Mirror VR experience, we’re expanding Peaky Blinders into new formats, and we’re creating live events around brands like The Traitors. We see significant opportunities wherever strong IP can travel beyond television.

Sport is another important growth area. Sport and entertainment are increasingly overlapping, and major sporting events need creative storytelling. Through Balich Wonder Studio, we produced the opening ceremonies for the FIFA World Cup in the U.S. and Mexico, just as we’ve worked on the Milano Cortina Olympic ceremonies.

Digital monetization is another major focus. With our catalogue, FAST channels and enormous social media reach, we believe there’s still considerable upside.

What about more acquisitions? With ITV Studios being spun off from the Sky-ITV deal, a new big target just came on the market. Are you interested in adding them to your stable?

It’s far too early to talk about that. We completed this merger only hours ago. We need to, shall we say, digest this first, to execute this merger. But I think if there are new opportunities, we know our shareholders support our strategy, they believe in us and our management team.

So if there is a good opportunity for us, we’ll take a look. But right now, there is nothing on the table [regarding ITV Studios], so there is no plan there. Our immediate priority is integrating Banijay and All3Media successfully.

Does strengthening your U.K. business and expanding more into the English-language production mean you’ll compete more directly with the major Hollywood studios?

Our model won’t change. We’ve always followed what I’d call the European model. We develop projects, invest in ideas, pitch them and, once they’re commissioned by broadcasters or platforms, we produce them. That gives us a balanced level of risk.

We’re not trying to become a studio, another Warner Bros. or Universal. Our strength is television. We’re the world’s largest producer of unscripted programming and one of the biggest scripted television producers. We will continue expanding in scripted series, unscripted entertainment and documentaries. But I believe that there will be more opportunity for us to take limited risk on projects that allow us to be more direct to consumers on the other side of the ocean.

So far, for example, we haven’t done much business in theatrical movies. But now we have a film like [Oscar-winner] Hamnet, which was sitting in All3Media [Hamnet producer Neal Street Productions is an All3Media company]. We will probably do more but that won’t be a priority. We will stay more with where we are, as the biggest producer in the world for unscripted and one of the biggest for scripted, but doing scripted mostly as series, not as theatrical movies.

What about newer formats like vertical dramas or microdramas?

We’re experimenting in some markets because our production companies have the freedom to pursue local opportunities. But strategically, it’s not a major focus today. We’re still assessing how sustainable those business models are.

Now that you’ve completed this merger, what’s the biggest challenge facing Banijay?

The first challenge is delivering the integration successfully, although we’ve done this before with Zodiak (in 2015), and with Endemol (in 2019), so we’re confident we’ll manage.

The bigger challenge is cultural. We have to preserve the flexibility that defines our company. Our industry changes constantly. Consumption habits evolve, distribution evolves, new business models emerge. We have to keep adapting.

I’ve just read that [French broadcaster] TF1 has had a very successful couple of weeks with its new deal with Netflix. So maybe they are going to change their strategy. We need to be ready to change ours to adapt in that market. It means staying lean and mean and focusing on what the market is asking for. And adjusting our business model to fit.

Viewing continues to grow, but people consume entertainment in very different ways than they did even a few years ago. Our challenge is making sure we create value wherever audiences are watching.

Banijay has completed several major mergers while many media mergers have struggled. What’s your secret?

If I had the secret, I wouldn’t tell, but there isn’t one. From the beginning we’ve built a model that can absorb new businesses without changing what makes them successful. Producers in our “federation” keep their identities and their entrepreneurial culture. Country managers support them, try to help them to focus as much as possible just on creativity, not on bureaucratic reporting.

You know, our business is IP and it’s people. You need to work with the people that feel comfortable working with you. All of us, including myself, come from production. We all come from the set, from the stage. We share that common experience. We speak the same language, we understand their challenges because we are all producers here.