EXCLUSIVE: Yesterday, Scottish broadcaster STV confirmed one of the biggest deals on British television so far this year when it announced its acquisition of indie production network Greenbird Media.
We had previously broken news of an impending deal and a stock market release confirmed that commercial broadcaster STV had initially paid £21.4m ($27.2m) for the indie, which houses 14 production companies under an innovative incubation model. aimed at promoting up-and-coming producers.
The deal saw previous majority owner Keshet exit and Greenbird management sell its stake, giving STV Studios, STV’s production arm, 100% of the business. It is understood there has been a bid for the London-based company, which is run by British television industry veterans Jamie Munro and Stuart Mullin.
We’ve now spoken to STV CEO Simon Pitts, who detailed the strategic thinking behind the Greenbird deal and how it reinforces the strategic objective of making STV Studios the largest UK producer outside of London.
“The deal is transformative because it’s the right thing to do [for the strategy] and is accelerating sales and profits away from traditional advertising into a key growth area of global content ownership,” Potts said in an exclusive interview.
“It makes us one of the leading production groups in the UK and takes us much closer to becoming the most successful producer in countries and regions. We live in a time where the focus is shifting a little from London and the South East. It is a significant advance from where we are now.”
Potts said STV Studios is already on track to double its revenue to £50m from £24m in 2022 and profit to £3m from £1.3m. Greenbird – which includes esteemed producers Tuesday’s Child Television, Crackit Productions and Rumpus Media, among others – will also generate significant revenue.
“Crucially, and more important than the financials, is that the number of recurring series has increased from 12 to nearly 40,” Pitts said. “That’s the foundation of a successful production business — knowing that you have a series of recurring shows on January 1st, so you don’t have to reinvent your business on day one every year.”
The UK production system leaves international rights to producers rather than the networks who order them (although global streamers have changed that somewhat), but Pitts said the merger with Greenbird would not automatically result in STV launching its own global distribution business at ITV and the BBC. Instead, they would continue to work with third-party distributors on individual programs – Banijay Rights sells the well-travelled programs lego masterFor example.
“Greenbird and STV Studios have actively maintained their distribution-neutral status over the past several years,” said Pitts. “It’s an advantage to have the best individual shows with different people instead of just having one partner.”
He added that with the “extended reach and more intellectual property rights,” STV Studios will consider “international and UK expansion with second-hand sales,” adding, “We’ll be doing that alongside our Greenbird peers, but so far have we benefited from it.” be different while remaining neutral.”
Pitts also addressed the challenges of running a large terrestrial network at a time of economic turmoil, declining advertising markets and ailing streaming models. As an advertising-financed broadcaster in Scotland, STV is more concerned with the ailing TV advertising market than with the writers’ strike and the upcoming actors’ strike in the US. Pitts was generally optimistic about advertising.
“The advertising market is cautious and subdued in the first quarter of this year and that has continued into the second quarter – in line with the rest of the economy in the UK and elsewhere,” he said. “But advertising is very resilient. The Covid case study shows us how quickly it bounces back after shocks. It was assumed that it would take several years for the pandemic to recover, but that happened in 2021. The total amount of advertising revenue in the first quarter of 2023 was higher compared to 2019.”
“TV advertising is resilient, but people are cautious at the moment. When it comes to content demand, we’ve found that commissioners are more cautious,” Pitts said. “This is cyclical and demand will come back strongly. Our job is to ensure we have the most impressive network of creatives to capitalize on.”