These debt positions are often still within the applicable limits.
The great attack by the super-rich Silicon Valley companies on traditional media organizations is taking epic proportions. Apple + is the latest addition to all the initiatives from the famous San Francisco valley: for the Cupertino company, this investment is of some strategic nature, but on the balance sheet of the company a piece of cake.
The answer of the traditional media industry (to which I also originally assign distribution companies such as Comcast) is scaling up. The deals in recent months have been unprecedented: Disney acquired Fox, AT&T bought Time Warner, Comcast acquired Universal a few years ago and most recently Sky.
Multiple deals are still in the works, Mediaset, for example, is building a significant stake in ProSiebenSat1. The result of all this? The debt of the acquiring companies is growing to alarming levels. The SEC in the US published the debts of these companies in the middle of this year. Sony and Viacom are still refraining from large transactions and have debt positions to be used (USD 5.2 and 9 billion respectively). But others are building massive debt positions: Disney $ 57 billion, Comcast $ 101 billion, and AT&T, $ 170 billion!
Now money is unimaginably cheap right now, so now is the time for these types of transactions. These debt positions are often still within the applicable limits. These are usually calculated as the ratio of the debt position (minus cash) to the profitability of the organization (usually expressed as the EBITDA figure). In almost all cases, this figure remains below 4 for these companies. But when times change, interest rates rise and profits shrink during a recession, Leiden is immediately in trouble. In short, Hollywood takes a fair amount of risk.
A good example of what debt can do to a company is Endemol. Before and after the merger with Shine, the company was crammed with debt by its owners. The debt position was approximately $ 1.8 billion, giving a ratio of approximately 10. A company can simply no longer pay the interest on this type of debt. The result of such a situation is that in these circumstances companies cannot invest enough to grow and expand the position. Banijay is now taking over the debts of EndemolShine and, if not careful, will also take (too) great a risk.
Those risks can only be accounted for if the acquirer has a clear strategy and rigorously implements this strategy. Disney seems to have done that: the company will immediately serve the consumer (with which it already has experience via the theme parks) with its range of VOD brands. The launch of Disney + was successful despite the necessary flaws and ESPN (Disney's sports brand) also seems to be doing well. The company is managed very tightly and will survive despite the great risks.
But in many other cases, the focus is only on the transaction and the top of the organization forgets the execution. The lesson of practice is that many takeovers are not that successful at all and end in failure. Usually this is simply due to the execution: management is a craft and that is sometimes lacking in the media. Formulating a clear plan of action and then executing it is not at all sexy and is often forgotten. In those cases, a mountain of debt really becomes a problem!
In the 1960s, the United States fell behind in the space race with the Soviet Union. Yuri Gagarin was the first human to break through the Earth's atmosphere, a monumental achievement. Unable to accept this, the United States - through President John F. Kennedy - established the goal of landing the first person on the moon within a timespan of 10 years. The rest is history and the wording of such a distant, grand objective became known as the 'moonshot goal.'
Stating such a goal is even more important when things are a bit difficult. That was the case with Kennedy's example and is the case for many public broadcasters in Europe. The sentiment in politics is generally unfavorable, budget cuts are commonplace, and digital competition is capturing viewership share. Young people are increasingly unable to find public broadcasters, and consequently a significant strategic crisis has emerged. This is the situation in Scandinavia, Germany, the United Kingdom, and in our own country. Let alone the situation in Poland and Spain.
So, there is a crisis in public broadcasting in Europe, precisely at a time when polarization is increasing, and misinformation is rampant. Especially during such times, it is crucial to prioritize neutral reporting and foster a sense of community. Excellent leadership is invaluable in such circumstances. And it's not the first time that the BBC has set an example during such times. Tim Davie, the excellent Director-General of the BBC, spoke at a Royal Television Society event last month. His argument centered around the fact that the future of the United Kingdom is at risk in democratic, social and cultural terms. He saw three roles for the BBC in countering this threat. Pursuing truth with no agenda by reporting fearlessly and fairly. Backing the best British storytelling by investing in homegrown talent and creativity. Lastly, bringing people together by connecting everyone to unmissable content.
That's what you call a moonshot goal! Because what follows from this? The BBC must serve its 'customers' from every platform, at all times. BBC Three will be closed as young people will find BBC content online, via iPlayer. New services are being developed, such as BBC Verify: the future major fact-checker. Interventions will be made in the BBC organization to make all this possible. And finally, the BBC will also explore whether a new, better funding system than the archaic licensing fee can be developed.
Isn't it wonderful? In the United Kingdom, significant changes are being developed from a strategic perspective. In the Netherlands, we only see politically motivated cost-cutting measures within the public broadcaster, neglecting the pursuit of deliberate strategic advancement in the media sector. I rest my case...
Na een loopbaan bij de commerciële (SBS) en publieke (KRO-NCRV) omroep belandde Rijssemus bij producent IDTV, onderdeel van het Britse All3Media dat hem uiteindelijk richting Berlijn dirigeerde om ook de Duitse markt te veroveren. "Dat had ik niet verwacht, moet ik zeggen", aldus Rijssemus lachend. "Ik dacht: ze vragen me voor Amerika, of een bedrijf ergens in de UK misschien."
Wat trof Rijssemus aan en is Duitsland nog steeds 'de heilige graal'? "Je moet de balans vinden: hoeveel energie geeft en kost een baan je?"
Hoe kwam deze student fiscaal recht en economie uiteindelijk in de mediawereld terecht en waarom wilde hij namens RTL zo graag Videoland overnemen? “We hebben daar veel van geleerd en ook heel veel fouten gemaakt, met name een deel infrastructuur totaal nieuw moeten bouwen”, blikt Habets terug. “Toen we 40.000 abonnees hadden, bleek het platform niet meer aan te kunnen…”
Inmiddels opereert hij vanuit München op de Duitse markt en past ook daar zijn ervaring toe met “het omkatten van een televisie- naar een streaming first-bedrijf.” Habets romantiseert zijn internationale carrière niet: “Je moet eerlijk zijn naar jezelf en het doen om de juiste redenen, anders wordt het gewoon een baan.”