Burnett's IMG buyout could become reality


Global talent agency and TV producer IMG is in talks to acquire at least part of Mark Burnett's Mark Burnett Prods.

The "Survivor" mastermind has been looking to sell his company for some time and last year retained Bear Stearns to shepherd the process. Burnett has met with a range of potential buyers, including top reality players FremantleMedia, Endemol and CKX, the parent company of 19 Entertainment.

IMG — which has made growth in TV a major priority since tapping former HBO boss Chris Albrecht as global media head in September and giving him access to a $250 million private-equity fund for acquisitions and investments — also has been in the market for a successful reality production company.

IMG has talked with such players in the field as Bunim/Murray and the Gurin Co., and in April, it inked a deal with Glassman Media to partner on producing and distributing unscripted series.

The parameters of the potential deal with Burnett's company are still unclear, with insiders indicating that at least half the company is up for sale. The rumored price tag is $250 million, outpacing the $200 million Elisabeth Murdoch's Shine group recently shelled out for another big U.S. reality player, Reveille, which also boasts a successful scripted division. In 2000, CKX paid $200 million for 19 Entertainment, the company of "American Idol" creator Simon Fuller.

In what could be another sign of Burnett's intentions, his top business associates at MBP, Conrad Riggs and Roy Bank, recently exited the company.

Burnett owns or co-owns the format rights to most of its series, including "The Apprentice" and "Are You Smarter Than a 5th Grader?" but often outsources the production of international versions to other companies, such as FremantleMedia and Reveille. Even though "Survivor" is based on a British format, Burnett's super-rich deal with CBS for the show is said to be crucial to the high price tag for his company, along with the fact that MBP is one of the last marquee indie-producing companies available.

An indicator of the potential deal with IMG is that the negotiations with Burnett are being spearheaded not by Albrecht or head of programming Rob Lee but by IMG chairman and CEO Ted Forstmann.

Potential growth areas for Burnett's firm that could entice a buyer are new cable network products and expansion into ancillary partnerships, like his April deals with the History Channel to produce "Expedition: Stanley and Livingstone" and a partnership in putting on live productions with AEG.

If a deal between IMG and MBP is struck, it will be the latest in a series of deals involving independent reality producers selling at least part of their companies to well-financed partners. In addition to the U.K.-based Shine's purchase of Reveille in February. Through its U.S. division, Dutch giant Endemol acquired a controlling interest in 51 Minds in April.

Dealmakers said nearly every independent reality production company has explored partnerships or purchases with cash-rich foreign distributors looking to get a foothold via a successful reality production company.

"Because the dollar is so weak right now, everybody is out meeting with foreign companies," one source said. "Twenty million is a lot to us but, for them, it's like getting a company for half price."

Another insider downplayed the impact of the U.S. economy and cited the value of buying a reality production house in an era where there are so few affordable and successful entertainment firms up for grabs.

"There's very few U.K. companies available and there are exceptional U.S. companies available," the insider said. "Five years ago, it was very easy to go to the U.K. and rummage through their library. But it's been rummaged through, and they're actually valuing us in a way we haven't been valued before. We are in the first third of what's going to be two years of a lot of this." (partialdiff)