New York funding agency KKR started its outstanding German shopping for spree in 2019. When it was performed, one of many world’s largest movie and TV markets appeared dramatically completely different. The bold studio it created, Leonine, is an accumulation of corporations, together with movie and TV powerhouse TMG, movie distributor Universum, Dark producers Wiedemann & Berg—one in all Germany’s main TV manufacturing labels—and a number of factual indies.
Last 12 months, the corporate bought additional funding from pan-European media entity Mediawan Alliance (which is backed by KKR and French funding agency MACSF), then they moved into a brand new Munich HQ and launched a TV gross sales enterprise with the 10-part worldwide motion sequence Professionals, starring Brendan Fraser. This week, Mediawan and Leonine introduced their acquisition of a controlling stake in UK TV firm Drama Republic.
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One of essentially the most talked-about new corporations in Europe, Leonine has a library of 1000’s, and spectacular pulling energy. The agency’s clout has already been delivered to bear in movie markets, the place it’s acquired main titles, together with Knives Out, John Wick: Chapter 3—Parabellum and Roland Emmerich’s upcoming Moonfall.
Consolidation on increased floor is smart in a market the place the streamers are rising apace. Leonine’s CEO Fred Kogel (pictured)–previously of ZDF, ProSieben and Constantin—discusses the agency’s speedy rise, and the way COVID-19 has impacted enterprise and development plans.
DEADLINE: Let’s return to the start. Why did it make sense to launch Leonine and what have been the primary obstacles?
FRED KOGEL: When we discuss beginnings, that may be early 2018: two years earlier than Covid, however just a few years into the huge digital disruption we’ve seen within the leisure trade. My concept was very clear. I knew there could be increasingly more streamers. That’s the irreversible megatrend, and the way that content material is consumed. It was at all times vital for me to construct the corporate for the digital world.
There was going to be a necessity for native content material for the streamers getting into Germany, in addition to quantity for the broadcasters who could be competing. In my earlier 25-year profession just about every little thing had at all times ended on the German, Austrian, or Swiss borders, however for the primary time, there was an opportunity that German content material may journey internationally, as a result of we now have the standard of individuals and tasks in Germany, and the streamers give us a world platform.
DEADLINE: To what extent did you are feeling trepidation in regards to the enterprise, or that there could be a goal in your again?
KOGEL: In phrases of the psychology of it, to be sincere, it was a aid. I had based Kogel & Schmidt and Constantin Entertainment beforehand, however I’d by no means labored with a non-public fairness investor earlier than. That made it a reasonably unemotional, clear path. It was a fantastic expertise.
DEADLINE: How did you first meet the KKR workforce?
KOGEL: I first met the KKR guys in 2006 or 2007. They requested me if I used to be focused on doing a unique job, however I needed to go as a result of I used to be with Constantin at the moment and was not able to get out of my contract. We had conferences from the mid-2000s onwards, however there was by no means the correct venture to collaborate on.
At the tip of 2017, [KKR co-head of European private equity] Philipp Freise and I bought collectively once more. We mentioned the panorama, and we agreed that there might be one thing we may do. Then I sat down for 3, 4 months engaged on an idea, which required a sure measurement and high quality, and adhering to sure traits of the German market.
DEADLINE: The firm’s M&A has been well-documented. But the place is Leonine at this time? What are the primary priorities for the corporate?
KOGEL: The first three years was about bringing the businesses collectively and doing a full integration. Now we’re full-steam on development once more. This is available in two kinds. Firstly, by way of natural development in manufacturing, in our fiction and non-fiction corporations, and likewise development in our distribution items, particularly digital distribution. The second half is inorganic development. We wish to M&A once more and we’re getting ready for that. We wish to develop greater. As you realize, final 12 months we got here along with our sister firm Mediawan to offer us a broader European perspective.
Our key goal is to change into the primary impartial manufacturing and distribution firm in Germany. I don’t assume we’re distant from that. But we’re working very laborious and really humble on daily basis in that focus on.
DEADLINE: What kind of M&A may we see?
KOGEL: It shall be vital to develop in fictional manufacturing by way of corporations that make premium TV sequence. This is one thing we’re searching for. We are wanting not solely in Germany but in addition at different European targets. This shall be our predominant focus.
DEADLINE: To what extent has Covid knocked the corporate off its stride and dented the underside line?
KOGEL: In the tip, thank God, not very a lot. Of course, Covid hit us in theatrical revenues, however we had an excellent 12 months final 12 months when it comes to manufacturing, and particularly in nonfiction manufacturing. There was a giant want for content material. Our house leisure and licensing divisions additionally did effectively. Our built-in mannequin actually helps.
DEADLINE: You had stated you needed to launch 20 movies a 12 months theatrically, so lockdown will need to have harm a little bit.
KOGEL: Yes, we had needed to do 20 movies. We will launch 10 movies within the second half of this 12 months. We assume we can have a blockbuster 12 months in 2022.
DEADLINE: There is expectation that non-public fairness corporations will promote on their funding in some unspecified time in the future, usually after a 5 to seven-year span of development. Is it doable that Leonine is nearly 50% by way of its life cycle of being a KKR-backed firm?
KOGEL: It’s true that that could be a frequent life span for personal fairness corporations, however as a administration workforce we’ve by no means thought when it comes to when KKR’s exit shall be. We’re very a lot targeted on the subsequent stage of development.
DEADLINE: In phrases of the corporate’s income, roughly what share comes from TV and what number comes from movie?
KOGEL: We differentiate when it comes to manufacturing, distribution and licensing. To date the segments are very balanced, nevertheless the manufacturing phase is gaining vital weight. Within the manufacturing phase fiction manufacturing accounts for the most important slice.
DEADLINE: Which tasks on the slate are you most enthusiastic about?
KOGEL: We have a giant TV venture known as The Gryphon that we’re doing for Amazon, and we now have the Bayern Munich documentary sequence additionally for Amazon. In phrases of theatrical motion pictures, it’s Borderlands, the franchise that we purchased from Lionsgate. That’s one in all our main motion pictures. Of course, there’s additionally Moonfall, which is due for launch early subsequent 12 months. We even have some native German sequence, together with Krass Klassenfahrt, which relies on a profitable German YouTube sequence, and encompasses a solid of influencers. We’re additionally lining up some non-fiction tasks for the streamers.