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Will Discovery buy SPP?

Earlier in the year, Fremantle Media was rumoured to be interested in buying up All3Media, which owns South Pacific Pictures. Now UK reports claim that Discovery has also thrown its hat in the ring.

In the overall scheme of things All3Media, SPP is a fairly small player, although one of few companies in the stable that produces drama almost exclusively. A3M owns almost 20 companies, including its own sales and distribution company. The majority of those companies are in the UK and US. UK analysts value A3M in the region of NZ$1 billion.

Among A3M’s various companies are the creators and producers of long-running shows Hollyoaks, Horrible Histories, Midsomer Murders, Shameless, Skins, The Only Way is Essex, Undercover Boss and programmes involving Gordon Ramsay.

Gordon Ramsay

Will Fremantle or Discovery break up All3Media?

Despite the fact that a good number of those titles are dramas, factual and reality programming makes up a bigger share of production and income generation across the A3M group. That makes the company a good fit for both Fremantle (The X Factor, Britain’s Got Talent) and Discovery, which doesn’t really do drama.

Just as A3M owns or has a substantial interest in many other companies, it is owned by a private equity company, Permira, which bought a controlling interest in A3M in 2006. Permira has interests in many companies, but A3M is its only TV and entertainment business.

Although “no comment” is the only comment coming from the parties allegedly in discussions, the rumour mill claims the story goes something like this.

In late January Fremantle approached Permira with a view to acquiring A3M. Permira entered into discussions with Fremantle and granted a period of exclusivity, during which it undertook not to engage with any other prospective buyers.

Ahead of MipTV, there were suggestions an announcement might be forthcoming, but it wasn’t. Fremantle’s period of exclusive access has now, allegedly, expired.

Discovery has now entered into discussions with Permira.

Permira tried to sell A3M in 2011, when it was smaller than it is now, for NZ$1.5 billion. Even at $1.5 billion, its value is less than 10% of Discovery’s.

Nobody’s talking on the record, so either an announcement will be made or it won’t. In the meantime, it’s business as usual. For SPP, that currently means production on Shortland Street amd Brokenwood Mysteries.

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