There was a time when Fremantle was shorthand for the American Idol company. ABC’s iconic entertainment brand was undoubtedly a coveted calling card, but it also served to constrain perceptions of a company that harbored a grander vision.
Peter Bose, the preeminent Danish drama producer behind shows including Wallander, knows this better than most. He recalls a conversation he had with CAA in 2013 after telling his agent he wanted to sell his company, Miso Films, to Fremantle.
“Fremantle? Who is Fremantle within scripted?” came the reply. “We couldn’t actually argue, you know,” Bose remembers. A decade on, the acquisition of Miso was a brick in the foundations of Fremantle delivering more than 100 dramas last year.
Fremantle is now firmly established in the scripted game. It was the company that transformed Sir Kenneth Branagh into Boris Johnson for This England. Its Nordic noir hit Face to Face, made by Miso, was key to Viaplay’s international rollout. Fremantle even sold Neighbours to Amazon’s Freevee, proving that soaps are not parochial relics of linear TV.
The journey into scripted was a slow burn for many years, but things changed in 2021 when Fremantle lit the fuse on a dramatic spending spree. In less than two years, Fremantle has splurged €250M ($270M) — a figure we can disclose for the first time — on 11 companies, growing its fleet of roughly 40 labels by a third.
It scooped up arguably the most sought-after outfits in Ireland and Italy, landing the signatures of Normal People producer Element Pictures and Lux Vide, which makes Devils. The figure includes unscripted — when documentaries were seen as a chink in its armor, Fremantle slapped £38M ($46M) on the table for roughly half of 72 Films, the British producer known for high-end series including Netflix’s Jimmy Savile: A British Horror Story.
“They’ve gone on a mad one,” was how one rival summed it up.
Based on an analysis of financial documents and conversations with Fremantle’s top executives, anonymous insiders, competitors, and analysts, Deadline has sought to build a picture of an M&A spree that has set industry tongues wagging. This is the story of how a historic production giant awoke from its deal-making slumber to set the running in a red-hot acquisitions market.
A History Lesson
Fremantle is the product of acquisitive minds. The company has grown up through waves of television consolidation and can trace its roots back to 1917, when German production powerhouse UFA was forged in the fire of World War I’s propaganda battle.
Eighty years on, UFA merged with Luxembourg-based broadcaster CLT, which later combined with Britain’s Pearson Television, owner of iconic brands like Baywatch and The Price is Right. RTL sprouted from this union and its production assets were rebirthed as FremantleMedia. Pulling the strings was German juggernaut Bertelsmann, Fremantle’s ultimate parent company and one of Europe’s largest private media companies.
Jennifer Mullin, Fremantle’s Chief Executive, serves up this history lesson as she reflects on the reasons why she opened her checkbook. “This isn’t a unique journey for us. It’s really the foundation of how we’ve come to be,” she says in a rare interview from her home in LA.
Mullin’s French predecessor Cécile Frot-Coutaz, now running rival Sky Studios, favored smaller bets. She took control of Miso and The Young Pope producer Wildside, as well as buying quarter stakes in a number of UK producers, but was generally “circumspect” when it came to acquisitions, according to one former Fremantle executive.
Mullin says an early priority of her tenure was to supercharge the spending. Plans were worked up in 2019, only to be paused in 2020 as the pandemic shut down production around the world. By 2021, Mullin, then based in London, was meeting with the likes of David Glover and Mark Raphael, founders of The Elon Musk Show maker 72 Films, to sow seeds for deals that would blossom last year.
One theory for Mullin’s trolley dash is that Fremantle had fallen behind in Europe’s content ownership arms race. Banijay acquired Endemol Shine Group for $2.2B in 2020, while French peers Newen Studios and Mediawan emerged with their wallets. ITV Studios, Sony and All3Media remained in deal mode internationally. Amazon inhaled MGM and Netflix was buying drama companies in the UK, including Charlie Brooker’s Broke & Bones.
“They struggled to buy anything in the past. There was a bit of catching up to do,” says the boss of a Fremantle competitor.
Mullin says Fremantle needed to diversify into drama and documentaries, as the company sought to strap wings to an engine room of entertainment formats. Her first big move was dropping €39M ($42M) on This Is Nice, a collection of 12 Nordic production labels that once formed NENT Studios.
Announcements then came thick and fast. Fremantle turned a minority shareholding in Dancing Ledge, producer of Martin Freeman’s BBC series The Responder, into a controlling 61% stake for £4.8M ($5.8M). Lux Vide and Element joined the group last year, as did Passenger, maker of This England. Fremantle also took control of Israel’s Abot Hameiri, the producer behind Netflix hit Shtisel, and purchased a quarter of Fabel Entertainment, founded by the brains behind Bosch.
Over in documentaries, Fremantle valued 72 Films at nearly £70M ($85.4M) after buying 55% of the company. It acquired just over half of Wildstar Films, the Bristol-based producer of Disney+’s Epic Adventures With Bertie Gregory, for £11M ($13.3M). Israel’s Silvio Productions sold Fremantle a similar stake for £646,000 ($785,000). Fremantle also tightened its grip on Label1, doubling a 25% stake in the Five Dates A Week producer for £500,000 ($610,000). Many of these financial figures are being disclosed for the first time by Deadline.
By the end of 2022, Fremantle was the second most active player in the frothiest M&A market for five years, according to analyst Omdia.
Three Billion Reasons To Spend
There was another important factor in the buying blitz: RTL announced to shareholders in August 2021 that Fremantle had been set a four-year revenue target of €3B ($3.2B), meaning the company has to find a cool €1B by 2025.
Hitting €3B in revenue would put Fremantle on par with Banijay, which coincidentally revealed last week that it expects sales to hit this magical number once its 2022 earnings are audited. But Banijay reached the milestone thanks largely to the transformative acquisition of Endemol Shine Group, maker of MasterChef and Big Brother.
Mullin has kept quiet about the prospect of a similarly audacious deal, despite speculation in the Financial Times that RTL/Bertelsmann could look at ITV Studios, which boasted sales of £1.76B ($2.1B) in 2021. The CEO says her team is on course to meet RTL’s revenue goal, which she insists was not foisted upon Fremantle in a moment of “magical” thinking.
Andrea Scrosati, Fremantle’s Chief Operating Officer and Continental Europe CEO, and Mullin’s effective second in command, adds: “We have definitely never felt this was irrational… RTL is giving us all the support to make it happen.”
RTL has backed Fremantle to the tune of €250M ($270M) over the past two years and the spending is not over yet. Mullin hints at more deals in documentaries, while she highlights Latin America and India — now both helmed by Ganesh Rajaram — as growth territories. “A few more transactions are already in process,” she says, though declines to offer details. Hat Trick Productions, the seasoned UK producer behind comedies Derry Girls and Episodes, has been floated as one potential target.
Some argue that Fremantle’s very public revenue target has left it vulnerable to overpaying for production companies. Two well-placed sources say Fremantle raised eyebrows with the money it spent on 72 Films, even with Amazon’s eye-catching adventure series 007’s Road to a Million on its order books. “They are paying big sums at the moment — rightly or wrongly,” says a third source.
Banijay was among the bidders for 72 Films, but pulled out after balking at the price tag, which was modeled on the £103.5M ($126M) ITV Studios paid for Plimsoll Productions, producer of Apple’s Tiny World. “It was quite clear that they were going to go for a lot more than Banijay was willing to pay given the amount of IP in the company,” says a person familiar with the process.
Fremantle insiders say partnership is often more important than price, with a source pointing to the relationship between UK chief executive Simon Andreae and 72 Films’ founders. Scrosati argues that you will “not find one single vanity transaction” if you analyze Fremantle’s deals. A colleague adds: “Andrea walks away from deals all the time. He does a huge amount of due diligence and is very big on cultural fit.”
A UK rival grudgingly acknowledges: “They’re buying good quality talent.”
Margins, Margins, Margins
Attention is now turning to bedding in Fremantle’s new friends. Insiders talk about an obsessive focus on profitability. “Fremantle is basically margins, margins, margins at the moment,” says one insider, who could speak more freely off the record. “There’s pressure on us to make a return,” another adds.
Scrosati does not deny it is a priority. “Our shareholder has invested a lot in the company and deserves the company to be profitable,” he says. Bose, of Miso Films, puts it another way: “We’re not here to deliver the status quo.”
Speculation about a restructure is rife among Fremantle’s production chiefs. Fremantle has in the past shown a willingness to reshuffle the pack, including merging British companies Naked, producer of Hulu’s Planet Sex With Cara Delevingne, and The Apprentice UK producer Boundless. Naked, set up by Andreae, was brought under full control by Fremantle in 2020 for £4.8M ($5.8M).
More recently, UK drama label Castlefield has been paused as Fremantle concentrates more power around Christian Vesper, the newly minted CEO of global drama. Hilary Martin, Castlefield’s boss and producer of BBC3’s BAFTA-winning In the Flesh, is now working for Vesper, who was rumored to have been courted by Banijay before it appointed Christian Wikander as its drama chief. Colleagues say Vesper has “impeccable but very high-brow taste,” favoring arthouse-style limited series like The Apartment’s We Are Who We Are.
Scrosati denies that consolidation is on the agenda. “We have never changed names, incorporated companies or canceled brands or canceled cultures,” he says, a sentiment that does not fully square with the Naked maneuver.
Elsewhere, Mullin has been ruthlessly disposing of unwanted assets. Fremantle has written off £7M ($8.5M) of investments over the past two years, pulling out of companies including Bend It TV, Bend It Like Beckham director Gurinder Chadha’s company; drama producer Duck Soup Films; and Dr Pluto Films, established by the creators of horror gameshow Release The Hounds.
Fremantle also sold Ludia, a game developer, for €144M ($156M) to Jam City in 2021. “We looked at some of our holdings and divested ourselves of things that didn’t feel core to our business,” Mullin explains.
She has restructured Fremantle’s top team, anointing a flurry of chief executives since the turn of the year. Vesper was promoted, while Fremantle now has CEOs in northern and southern Europe, bringing its total number of chief executives to nine across its global leadership team.
Some detractors say Fremantle is a “highly political” environment and is unusual in having so many group leaders dotted around the globe. “There are a lot of MD-level people at Fremantle who turned into CEOs. The company is confusing, and a lot of people outside the business don’t know who’s doing what,” one employee says.
Mullin says her management style is to empower those around her. Scrosati, the former Sky Italia executive, is the best example of this. From his home in Rome, he has built his own fiefdom in the Fremantle empire, spearheading the company’s push into scripted. His ambition is no secret among colleagues and he is said to be savvy about his press operation, often working with an external PR agency.
One thing is for certain: The seat of power at Fremantle is no longer in London. “We’re not a UK-based company,” Mullin says. “I’m a firm believer that if we do have our executives spread out, our teams have more access to all of us and there are different perspectives.”
Sale Talk Scotched
Fremantle’s spending spree and focus on profitability has sparked speculation that RTL is fattening the producer up for a sale.
One senior industry executive says: “When you’re investing that amount of money in companies, paying consistently above the odds, and at the same time you hear from people who work for Fremantle that they’re all being told: ‘Cut costs, strip out overhead.’ There’s only one reason you do that, which is to make your bottom line as rich as possible so that you can sell yourself.”
François Godard, a senior media analyst at Enders, agrees: “I wouldn’t be surprised if RTL sold it at some point, if the price is right. The problem is, it’s not obvious to me who would buy it.”
Fremantle’s leadership would not be drawn on the speculation. Thomas Rabe, chief executive of RTL Group and Bertelsmann, firmly brushed off talk of a sale in a statement to Deadline.
“Fremantle is and will remain core to RTL Group’s business and growth strategy,” he says. “Fremantle has firmly established itself as a home and attractive partner for the best creative minds, across entertainment, fiction, and documentaries.”
In fact, one source with knowledge of Bertelsmann’s inner workings says it has been investing heavily in Fremantle because its management has acknowledged how content and IP ownership is rapidly becoming more valuable than traditional broadcasting.
Even if RTL says Fremantle is in control of its own destiny, there remains a nagging feeling that its grand ambitions could yet be unraveled by factors beyond its control. As the company pushes in its chips, others are taking them off the table. Faced with runaway inflation and dampened demand for content, Fremantle’s customers are slashing costs. “It gives me pause,” Scrosati admits.
But Fremantle’s leaders will tell you that its 100-year-old DNA has survived worse than the current economic crisis. The company hopes that its mantra, to be the “place creatives call home,” sees it shapeshift its way through another century of television history.
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