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Endemol Chair/CEO Ynon Kreiz Steps Down Amid Financial Restructuring With Lenders

2ND UPDATE: A key insider at Endemol explains to me, “I think there were issues in the way he ran the company and the decsions he made, and he lost the support of many of the employees. Like when you have a coach of a soccer team the players don’t buy into the way he’s managing the team.” Not only unpopular, Ynon Kreiz exits as Endemol is facing a 900 million euro write-off of loans to the Dutch-based company which produces Big Brother among many other unscripted shows around the world. Endemol also said this month it’s exploring options to restructure its debt as widening losses will cause it to breach covenants on 2.8 billion euros of loans, including 325 million euros of mezzanine debt used to fund its 2007 buyout. Reports are circulating of buyout interest from ITV, Time Warner, and News Corp. “Clearly there are debt issues and we’re going through a financial restructuring. There also was unhappiness with a huge payout to Kreiz, which didn’t sit well,” the key insider tells me. “But from a standpoint of creativity and new shows and long-running franchises and diversification of the company, we’re on solid ground.”

The announcement of a shakeup at the top was made today by Endemol’s shareholder board (different from the usual board of directors) and first published by the Financial Times. The mogul’s exit follows a three-year period of massive dealmaking and restructuring by Kreiz, who has been chairman/CEO of the Dutch-based global leader in entertainment programming and the world’s largest independent television and digital production company since June 1, 2008. Kreiz follows out the door the Endemol chief commercial officer Tom Toumazis, who exited a few weeks ago. (“Believe me, I didn’t send him a fruit basket either,” an insider snarks.) But lest anyone doubt it, Endemol is still alive and well as the unscripted giant produces content and partners with more than 400 broadcasters and cross-media platforms worldwide as part of a global network of more than 80 companies in 26 countries employing about 6,500 people. Read More »

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Endemol Shareholders May Be Forced To Inject Fresh Equity Before August Deadline

endemol-logoThat’s the only option open to shareholders Mediaset, Goldman Sachs and Cyrte, one media analyst tells me. Whether Mediaset owner Silvio Berlusconi or TV magnate John De Mol, the man behind Cyrte, will be happy doing so is another question. I’m told De Mol in particular would be reluctant. There’s been speculation here that the super-producer will breach its debt covenants as soon as August. Endemol assures me this is not the case. “Given our current outlook, and taking into account the resources already available to the company and its shareholders, we strongly expect to continue to fully comply with our debt covenants for the foreseeable future,” Endemol says.

The company is €2.4 billion ($3 billion) in debt after a 2007 buyout. Combined with the cancellation of Big Brother on Channel 4 and NBC scrapping Deal Or No Deal in the US, it’s argued that the producer’s future is looking pretty bleak.

On the other hand, BBC1 just started an eight-part primetime summer run of the producer’s format 101 Ways to Leave a Gameshow. Fox in the US has commissioned a broadcast pilot of the show. Germany, Brazil and Turkey are making their own versions of the show, where contestants are violently ejected from the quiz.

One option not there anymore is buying back its own debt cheaply and marking it as operating profit. Endemol was rapped on the knuckles for doing that earlier this year, although it was perfectly allowable. Hedge funds representing … Read More »

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Newspaper Tycoon Tipped To Win Five

FiveRichard Desmond, owner of Express Newspapers, is seen as a frontrunner to buy UK terrestrial channel Five. Other bidders include John De Mol, founder of TV producer Endemol (Big Brother), and Endemol itself, which De Mol’s investment company Cyrte Investments owns one third of.

You may wonder, as I have, why De Mol would want to bid against a company he indirectly owns part of? The answer is, apparently, that there’s no love lost between De Mol and the company he co-founded back in the 1990s. De Mol’s Cyrte Investments has reportedly teamed up with Talpa Media and Greece’s Antenna Group for De Mol’s personal bid, says the Financial Times.

Analysts believe that RTL wants up to $245 million for Five. It is difficult to put a price on Five because, although it is loss-making, it has a strategic value which belies its place in the market. Five also owns desirable slots on the Freeview digital terrestrial TV service. Like newspapers, there’s bragging rights in owning a TV station. Not many come up for sale. That’s why they’re so prized.

Desmond is a colourful character with a £950 million ($1.4 billion) fortune. His TV interests include digital porn channels Television X and Red Hot TV.

BSkyB was kicking the tyres on Five, as was Time Warner, but both have walked away.

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