The MEDIA DEALS information platform is open to investors and to network and funds managers as well as to media entrepreneurs and public institutions.

It offers news and analysis on the media sector in Europe and beyond. This information focuses on private equity and regulation issues in the media sector and is provided by our partners both in the media industry and in finance(Cineuropa, peacefulfish) . The platform aims at developing a knowledge base on private investment in the media (statistics, studies, research, international academic cooperations, lobby...) to develop new collaborative models between private investors, media entrepreneurs and public institutions.

Deal News

Viacom, Lionsgate and MGM plan joint TV and VOD joint venture

New York. Viacom, Lionsgate and Metro-Goldwyn-Mayer (MGM) announced last April 20th that they will jointly launch a premium television and movie channel in autumn 2009. The joint venture will have originally produced programmes: series, new movies and classics. The service will be in competition with CBS’s VOD and television service, Showtime Networks. The venture will be led by Viacom, which should own the biggest stake. Financial details and business modalities are currently being implemented.

Carlyle completes a 1.1 billion euros investment in two French telecommunication companies 

US-based Carlyle Group, one of the biggest private equity funds in the world, completed a 1.1 billion investment in 2 French telecommunication companies. Carlyle acquired 37,8% stake from stakeholders Cinven and Altice.

Numericable is a cable high definition operator, and provides video-on-demand, internet and telephony services. Completel is a telecom and Internet operator providing alternative metropolitan fibre networks to companies.With this deal, the two companies were valued to 6.5 billion euros altogether.

French start up raises 2,4 million euros

Parisian start up Iminent has just completed a second round investment of 2,4 million euros, brought by I source and 360 Capital Partners. Iminent.com is a service platform dedicated to instant messaging & messengers users (such as Windows live messenger), who can chat, create and download content, among other services. The company, founded in 2006, had raised 3 million euros last year from 360 Capital Partners. “This second fundraising will be used to develop new services and approach the American market” said the company’s CEO Francis Cohen.

HgCapital agrees to sell Boosey & Hawkes for £126 million to Imagem Music

The London-based private equity firm, HgCapital, announced in April 11th that it had agreed to sell Boosey & Hawkes, to Imagem Music, a dutch-owned music publishing fund. Boosey & Hawkes is a classical music publisher which holds the rights of more than 116,000 works of music and choreography, among which Stravinsky, Prokofieff, Rachmaninoff and Britten. It was bought by HgCapital in December 2003 for £75 million, the private equity company thus achieved a 70% gain. This is explained by the impressive valuation of Boosey & Hawkes, which more than doubled its earnings in 4 years (from £3,3 million in 2003 to £6,8 million in 2007).

MySpace forms joint venture with major music labels

Last April, 3rd, MySpace officially announced the creation of a new joint venture, MySpace music, with 3 leading record labels: Universal Music Group, Sony BMG and Warner Music. The service aims to offer music streaming financed by advertising, as well as paying music downloads (MP3), ringtones, and other online services (such as booking tickets). A formula of unlimited music download through subscription is also being studied, according to The New York Times. Through this joint venture, MySpace and its mother company News Corp aim  to find new sources of revenues and conquer a highly growing market dominated buy Apple’s iTunes.

Trends

Mobile Location Based Services expected to reach $13.3 billion by 2013

 A recent report from ABI Research forecasts a huge development of mobile Location Based Services (LBS) might hugely develop, and the revenues should increase from $515 million in 2007 to $13.3 billion by 2013. Mobile LBS includes 5 categories of services: Personal navigation, friend-finder, local information searches and family tracker applications. Jamie Moss, research industry analyst at ABI asserts that "Personal navigation and enterprise services are projected to be the highest revenue-generating services of the five LBS categories profiled, and are forecast to be worth about $4.3 billion and $6.5 billion respectively, per annum, by 2013."

Technology Media and Telecom investors show optimism for 2008

 A study carried out by corporate financier Cobalt (UK), based on the interview of 105 Technology Media and Telecom investors (TMT), unveils that 96% of them expect their average investment size to be similar or larger in 2008, and 86% expect to invest similar or greater amounts than last year. In parallel with this positive sentiment towards 2008, it appears that the fear for recession is present in their mind since 85% of them stated they will be closely watching the economy. Digital media is ranked as the top high opportunity sector, followed by mobile software.

Cobalt founding partner Paddy MccGwire, asserts that “The private equity industry has considerable amounts of money to put to work, hence its appetite for increased investment activity. We are still seeing many entrepreneurs looking for a sale or MBO so the deal flow is there, but the variance in value expectations is growing.”

Regulation

The media sector is of national jurisdiction in most of EU member states, there is thus no harmonized legal framework properly-speaking at the EU level. Nevertheless, certain EU measures directly impact on this sector, notably as far as competition is concerned.  

EU wants to increase competition in new content services

In March 7th, 2008, EU media and information society commissioner Viviane Reding re-asserted in front of the European Parliament the Union’s determination to implement legal rules in line with competition. Her reform plans, unveiled last November 2007, include among other elements creating a market in radio spectrum to free up its use for new applications and create a new European communications market authority to ensure more consistency in the application of EU telecoms rules.

The reforms must be agreed by the European Parliament and EU states.

Private equity in Europe

Source: EVCA

OTHER NEWS

PRIVATE FUNDS

UK >>> U.K. production companies Recorded Picture Co., Ecosse Films and Samuelson Prods. have united in their quest to raise USD 47 million from investors looking to benefit from 'Visible Films' which uses both existing tax breaks and the new-look credit system to raise money for projects. By launching their own film-investment companies, the producers say they can "offer the public direct investment into their films."

UK >>> The website MySpace has launched a competition, with a big prize for wannabe movie makers. Any British resident can post their short videos at My Space Movie MashUp, and the winner will be allowed to direct a feature-length film with a GBP 1 million budget, to be released 2008.

USA >>> Entertainment finance company Relativity Media will co-finance around 90 films together with Citigroup, thanks to a five year deal the two have struck to create a financing facility. Although the size of the financing plan have not been revealed, it's thought to be in the USD 1 billion range.

TAX INCENTIVES

BRAZIL >>> Brazil has adjusted its exsisting Audiovisual Law and created a new law providing a fund for local films. The changes will provide a tax break for TV stations and allow local broadcasters and TV stations the possibility to co-produce films. Previously, the Audiovisual Law focused on foreign film distributors. The government hopes the tax break especially will bring Brazilian TV and cinema sectors together.

USA >>> The state of Michigan has signed a film incentive legislation. It will include tax rebates, varying in amount according to how much a company spends in Michigan. For example, expenditures over USD 5 million will receive a 20% rebate, while those between USD 200,000 and 1 million enjoy a 12% rebate. The rebate budget is capped at a total of USD 7 million per annum for the next four years, and will be dished out on a first come, first serve basis. Qualifying projects must spend at least USD 200,000 in Michigan, not have any outstanding debts and submit application to the Michigan Film Office and State Treasury for pre-approval.