A+E studios and ITV buy Endeavor Content

Written by Jessica Alexander, Special to CNN

Though television’s top source of showbiz success is declining fast, the biggest independent content company in the business has just been bought out by a deeper-pocketed behemoth.

Endeavor Content, a $3 billion media group in LA, has struck a deal with A+E Studios and ITV, the two companies that it bought in late 2015, ending a period of creative turmoil. The unit is in talks with a range of U.S. cable networks about potential co-financing arrangements, according to Variety .

If these deals go through, the trio would combine to produce an output roughly on a par with Warner Bros. and Disney Studios, combined.

Low five-digit millions

Endeavor, which had been struggling with poor performance from a number of upcoming projects, sold the scripted division for $15 million to Veria Living, the Israeli production company, according to people familiar with the matter. Endeavor and Veria Living declined to comment.

The firm is a division of WME, a global agency and distribution business that has grown into a $6 billion-a-year network of agencies that includes the likes of the William Morris and Endeavor talent agencies, as well as marketing businesses that manage the work of its clients. But the group has spent the past few years implementing growth strategies for its increasingly diversified portfolio, which has made advertising the center of its business but also now includes a presence in film, endorsements, and publishing.

Endeavor Content under the Veria deal owns the stakes of Vantage TV, an indie production company that produced Mark Burnett’s “Undercover Boss,” and Momsploitation, the company behind the Winona Ryder-led comedy “Limited Partners.”

In addition to the scripted division, Endeavor also houses the unscripted division – a company that has produced big names like “Big Brother,” “Married at First Sight,” and “MasterChef Junior.”

Endeavor was also able to pick up the third season of “Taboo,” the BBC drama starring Tom Hardy, at the last minute with a license fee of around $3 million. The series is yet to air. The original licensing deal with the BBC had come into question due to an ongoing dispute between the companies.

The financial disparity between the unscripted division and the scripted division has been a frequent point of contention at Endeavor since Endeavor Content was formed in 2015. The division was created around a restructure that saw the end of Creative Artists Agency’s (CAA) decades-long relationship with Endeavor. This parting of ways was a shakeup sparked by the 2015 explosion of salaries for entertainment agents that led to a financial conflict between CAA and WME.

WME had swooped in to buy CAA, its smaller cousin, earlier that year and acquired the performance and distribution rights to CAA’s client list as well as some talent and financial stakes in the firm for $450 million. The expectation was that the ad agencies would use the so-called “WME effect” to acquire the production arm of CAA in a move to consolidate their own portfolio.

It failed, but WME CEO Ari Emanuel and Endeavor co-CEO and Board Member WME co-CEO Patrick Whitesell are believed to have tapped Al Litvack to lead the division. Litvack, an agent and former CAA exec, is also now the co-president of Endeavor Content. He had served as CEO of CAA Films.

An all-in bet on scripted television

The exit of financial exposure from the company’s scripted division led to potential conflicts of interest with Endeavor Entertainment, the agency’s film and digital business. The company was told to get its investment in Endeavor Content right, according to one of the people.

And right it has. Under Litvack’s leadership, Endeavor Content has transformed itself from a division that was still struggling with the distribution and distribution contracts in place in late 2015. A creative slowdown that was felt across TV, film, and digital distribution, was largely attributed to the slowdown as a result of the Amazon Studios deal with Woody Allen in 2016.

A year later, that deal sent shivers throughout the industry. A number of TV studios began to clamor to sign up with the larger OTT service Hulu.

That was only the beginning of what would become a bruising bidding war for Amazon’s series rights. The last time this scenario played out was in May 2014 when Amazon beat out Netflix to pick up popular show “House of Cards.”

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