Sky has confirmed a deal to buy 70% of Love Productions and is understood to have the option to acquire the remainder of the company after a period of several years.
Although not an outright acquisition, the deal’s structure is similar to a traditional earn out.
Love co-founders Richard McKerrow and Anna Beattie will receive a significant initial payment and continue to run the company. They could then be due a second pay-out in around five years, based on the Bake Off producer hitting performance targets.
Broadcast first reported the deal last month, when sources indicated Sky’s determination to land Love had prompted it to make a knockout bid.
That desire, coupled with intense competition for one of the best known remaining ‘true indies’, has prompted Sky to pay a double-digit multiple price.
It is understood its ultimate investment in the company potentially runs to between £40m and £50m.
Sky strategy
The investment forms part of Sky’s strategy to grow “a broad, international content business spanning broadcasting, production and distribution”.
It is the company’s first indie acquisition and is expected to be followed by future deals, as Sky goes head to head with ITV and the super-indies to buy up talent and producers.
Love will operate as a distinct company under its new ownership structure and continue producing programmes for all the major UK broadcasters.
Channel 4 has been a key customer in recent years and Love is currently making Immigration Street, Make Leicester British and working towards a second series of Benefits Street.
It is understood that Sky director of entertainment channels Stuart Murphy’s admiration for Love was a key driver in the deal and that he has one or two major projects in development with the indie.
Outgoing Sky managing director of content Sophie Turner Laing described the deal as “a significant step for our growing international content business”, while McKerrow and Beattie added: “We are extremely excited by the prospect of a partnership with Sky. We feel it’s the perfect time to be working with a group who can help us realise our creative and commercial potential and fulfil all of our international ambitions for the Love brand.”
About Corporate Finance, which specialises in indie production acquisitions in both the US and the UK, brokered the Love deal.
International ambitions
International commissions and format exploitation is thought to be one of the key drivers.
Love has both a New York office and a Hollywood base called Love Baking and is keen to develop brands such as The Great British Bake Off and The Great British Sewing Bee.
BBC Worldwide has already sold the Bake Off format to 13 countries including France (M6), Australia (Nine Network), and Germany (ProSiebenSat.1), but Love retained the US rights.
It struck its own deal for a series with CBS, with Paul Hollywood on the judging panel of The American Baking Competition.
Sky Vision will become Love’s distribution partner and represent all new finished programmes and formats. The indie’s current agreements with other broadcasters and distributors will remain unchanged.
No comments yet