Banijay CEO Marco Bassetti on Buying Beyond, How to Survive Recession

Banijay Group CEO Marco Bassetti may be making a smart marketing move by delivering a Mipcom keynote on Oct. 18, but the Italian exec insists “PR comes after that for us.” In the first major TV market for the “Survivor” distributor since its $2.2 billion acquisition of Endemol Shine Group in 2020, Bassetti has a clear message: Producers, including Banijay, need a fairer business model towards streamers .

“It’s the golden age of content, but I’m not sure it’s the golden age of producer revenue sharing,” Bassetti says diversity from the Banijay Group headquarters in Paris at the end of September. “We have to be careful if we want to continue creating value in the industry. We have to fight for manufacturers to be able to keep their model as it was before.”

This model, of course, relates to the rights and back-end revenue that keeps Banijay’s 120+ production companies around the world afloat. Bassetti’s concern is now a perennial issue for the international production community, but his timing is spot on: If companies like Netflix live up to Wall Street expectations and compete with expanding SVOD rivals, producers sitting in good shows could finally be in the Catbird -Seat when it comes to deal negotiations.

“Sometimes you create the next ‘Squid Game’ and you get nothing – just a small fee,” says Bassetti. “We’re trying to avoid the model of being a contract producer and giving the other all the rights.” Instead, Banijay is increasingly being encouraged to take bigger risks, invest more money, make a product “that can be attractive to more than just one streamer ‘ and to retain part of the rights. (Banijay Group’s financial statements for the period ended December 31, 2020 show a “broad customer base” in which “no customer represented more than 10%” of the group’s consolidated sales.)

That’s not to say the world’s largest production company outside of the US studio system, which had $1.6 billion in revenue in 2020, doesn’t play with Netflix occasionally. As diversity Distribution arm Banijay Rights, which holds the format and finished tape rights to Black Mirror, renewed its deal with the streaming service for Charlie Brooker’s dystopian drama, news broke earlier this year. But the deal, which is still officially unconfirmed (Bassetti grins sheepishly), came about after almost two years of controversy after Brooker and her producing partner Annabel Jones left House of Tomorrow, their then-Endemol Shine-owned production company.

Ultimately, Banijay’s key partners have been linear and pay-tv partners, particularly for the format giants in its catalog such as ‘Big Brother’ and ‘Survivor’, which recently landed huge deals in the UK on ITV and the BBC respectively, and continue to do so sell all over the world.

Another priority for Banijay is to expand its scripted offerings, which make up just 25% of the total offering, with the vast majority being non-English. Deals like the recent acquisitions of Sony Pictures Television Germany, Romulus producer Grøenlandia Group and 30 Coins outfit Pokeepsie Films will help create the next screenplay hit, but there is some urgency for more English speakers Home runs, especially from the UK now that shows like Peaky Blinders are wrapped.

“It’s the most important and expensive market because English-language finished tapes can be shipped a lot, so it’s easier,” says Bassetti, who hints at a UK acquisition in the near future. For now, the Cannes company is hoping Stephen Knight’s new show Rogue Heroes, a dramatized portrayal of the formation of the Special Forces unit during World War II, will do well with new show Peaky Blinders.

Although some expected Banijay to divest some of its production units following the acquisition of Endemol Shine, Bassetti confirms that technically the company didn’t get rid of a single label, instead integrating a few companies into markets where there was overlap. Nor will that vast network stop the CEO from seeking further growth opportunities, such as acquiring Australia-headquartered Beyond International — a move that will bring in valuable unscripted English-language shows and add 20,000 hours to the catalog.

There are a few reasons to go beyond that, Bassetti says. First, the deal — which is still subject to regulatory approval — allows Banijay to grow in the Australian market. Beyond shows like “Mythbusters” also introduce a unique brand of English language facts not already on the list. Beyond also includes the unwritten TCB Media Rights catalogue, which it purchased in 2020 when TCB’s former parent company, Kew Media, went bankrupt.

“It’s the kind of deal we love the most,” says Bassetti. “They are very solid, focused on the business and able to leverage their intellectual property.”

Of Endemol Shine’s estimated $1.9 billion in debt, which Banijay assumed during the acquisition, Bassetti says the number is now “at a completely different level” than it was before. “Everyone said, ‘But you embedded the debt in Endemol,’ and sure [we did]but at a different cost because we have all renewed our contracts and the ratings we have with the agencies are completely different from what Endemol had before.”

Crucially, this also happened before the pandemic, Bassetti says. “If it had happened during COVID we could not have made this deal because the cost would have been high [too much].”

At some point in the conversation, Bassetti receives a call from Banijay chairman Stéphane Courbit. At the time of this interview, Courbit was among the potential buyers who crossed paths with French commercial broadcaster M6, owned by RTL Group. Ultimately, RTL decided to keep its majority stake in M6 for a while longer, but when asked about the possibility of M6 joining the family, Bassetti said, “I’m sure [Courbit] would do something that would add value to Banijay like he has done so far.”

However, the road ahead for super India next year will be difficult amid rising inflation rates around the world and a looming recession – the real impact will only be seen in 2023. Bassetti says a “flexible cost structure” at the company, which keeps 75% of costs flexible, provides some buffers, but immovable broadcaster and streamer budgets could prove problematic.

“You’re going to have customers who say, ‘My budget has stayed the same’ and we have different costs to manage. That is the fundamental discussion that we need to have with the commissioners,” explains Bassetti.

More resources are available, Bassetti says, since the company went public earlier this year and moved into Dutch-traded FL Entertainment, which is also home to Courbit’s online gaming company Betclic. FL then merged with SPAC Pegasus Entrepreneurs.

“Now we have such a large shareholder that they’re willing to put money in if we need it,” Bassetti says. That said, he adds with a characteristic twinkle in his eye, if there’s an opportunity to create more value, “we have the resources to do it.”