TF1: new agreement in favor of creation – 12.01.2023, 18:20

(AOF) – TF1 group, AnimFrance, Satev, Spect, Spi, Uspa, Sedpa, Sacd and Scam announced the signing of a new partnership agreement. This agreement, the first concluded by a television group covering both the DTT and cabsat decrees of December 30, 2021 and the SMAD decree of June 22, 2021, demonstrates the common wishes of the TF1 group and the players in the audiovisual sector. An ambitious and sustainable partnership in favor of French creation and to support the transformations of the sector and the evolution of uses.

This contract is concluded for a period of three years, until December 31, 2025.

The TF1 group renews its commitment to the creation of heritage works in the amount of 12.5% ​​of its turnover. To support changes in models for the exploitation of the works, the scope of the agreement now includes the free and paid streaming offering of the platforms published by the group, namely MYTF1, MYTF1 Max and TFOU Max.

In addition, Bouygues renews its independent production commitment of 70% of its subsidiary commitment. This agreement gives TF1 Group substantial funding for all independent work (ie 60% for creative documentaries and 50% for live shows and fiction and animation).

As such, this agreement gives the TF1 group access to significantly expanded linear and non-linear rights for all genres covered by the commitment, and extended access to significantly funded works. This will enable it to develop particularly non-linear exposure of its content and offer significant catalog depth of its digital offerings in the medium term.

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Key points

– Leading French TV group with 29.9% audience share among 25-49 year olds;

– Five free-to-air channels -TF1, TMC, LCI, TFX, TF SERIES FILMS- 4 thematic paid channels -TV Breizh, Histoire, Ushuaïa and SérieClub- and a digital replay platform, MYTF1;

– 2.4 billion euro turnover, 89% generated in France and divided into three sectors: channel advertising (76% of revenue), studio and entertainment activities with Newen and Digital Unify (17%), combined activities brings Under the brands Aufeminin, Doctissimo, Gamned! Marmiton, MylittleParis, Studio71 and Digital Factory;

– a business model based on 4 strengths: human, intellectual (editorial, commercial and content producer know-how), financial (fixed capital and cash flow) and physical capital;

– The 11-member board was chaired by Gilles Pélisson until February 13, 2023, due to the legal impossibility of the capital and takeover bid closed by Bouygues (43.7%) and employees (9.1%). directed by Rodolphe Belmer;

– There is no debt with shareholders’ equity of €1.8 billion and a net surplus of €296 million to be increased by the disposal of the Unify Publishers activities.

Challenges

– 3-point strategy: strengthening the core business, growth in broadcasting, production through internal synergies, development of Tech Media;

– Upstream with content production, downstream with digital applied innovation strategy based on TF1 FabLab:

– Expansion of OTT, AdTech, open innovation and Tech Media in the cloud;

– Support for startups (more than 30) with acceleration program (from creation to distribution) through One Inno fund, Media Lab and 3 innovation hubs;

– focus on database authentication (23 million users) for a targeted offer, including specific households through accuracy and granularity;

– Environmental strategy

– 2030: 30% reduction in CO2 emissions compared to 2019 through eco-production, digital prudence, soft mobility, decarbonisation of procurement and climate agreement,

– 2025: 35% reduction in electricity consumption of TF1 tower;

– France’s leading advertising agency, with excellent multimedia experience and the ability to continuously reduce production costs.

Challenges

– A highly regulated sector with repositioning and external growth restrictions, the rise of video on demand and uncertainties surrounding the re-opening of negotiations around the media timeline in February 2023;

– Questions about the future strategy of the group after the rejection of the merger project with M6 due to the demands considered by the Competition Authority to be too high;

– Rumors about the launch of the Salto video-on-demand platform;

– Targets to strengthen audiences with Star Academy and Newen Studios for the Media and delivery division, with the FIFA World Cup at the end of 2022 and significant in the 2nd half following a 5.4% increase in revenues and a 7% increase in operating profit at the end of September 2022 cooperation with platforms.

Sector analysis Communications and Media

French players are well positioned in audiovisual production

Among independent players, the French Banijay is the world leader with an expected turnover of 3 billion euros in 2022 in a market representing 100 billion revenues. With a turnover of €1 billion, Mediawan (backed by the KKR fund) is another major French player in the sector. The market is still highly fragmented, as the top twenty production groups are responsible for only 38% of titles created in 2020, according to the European Audiovisual Observatory. However, experts believe that the sector is entering a consolidation phase. Banijay’s stock listing is thus aimed at enabling it to better participate in this movement.