Master of reality
Ynon Kreiz has completely restructured Endemol. And he's just getting startedMore MIPCOM special reports
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LONDON -- It's 6 a.m. at a private gym in the North London enclave of Primrose Hill, and Endemol chairman and CEO Ynon Kreiz has been pounding the cross-trainer for almost an hour.
While other media executives shift dreamily in their sleep, the man atop the producer of "Big Brother" embarks on a round of gravity-defying pull-ups, imposing a punishing pace that doesn't stop when his workout ends.
After being hired to turnaround the global format producer by Endemol's private-equity shareholders in June 2008, Kreiz has had to move fast.
Not only has he found himself in the teeth of the worst recession in modern times, facing tough financial targets imposed by the capital structuring and covenants servicing a $4 billion leveraged buyout.
He must also reinvent the reality-dependent producer, a job that will require restocking its creative and commercial shelves.
"The biggest challenge is to wrap your arms around a company this size," says Kreiz, who logged 70 trips in his first seven months, zipping between Endemol's 26 regional offices.
Kreiz has bulked-up his senior team, bringing Disney distribution exec Tom Toumazis, 19 Entertainment format specialist Martha Brass, ITV legal eagle Andy Griffiths, digital guru Adam Valkin, Reed Midem exec Paul Johnson and IMG Sports execs Laurence Duffy and Gregg Oldfield onto the field.
Endemol has also restructured its 26 local fiefdoms, shifted commercial operations from the Netherlands to London, launched a sports production arm in London and taken full ownership of Australian producer Southern Star.
Does he expect his team to match his hyper-relentless pace?
"I don't feel that I need to work hard to motivate people here," he says carefully. "I believe people are intrinsically motivated by the idea of doing a good job."
"He liked energy people with spark."
The lobby of Endemol's West London headquarters buzzes with staffers under-30 flip-flopping to meetings past screens playing Endemol hit "Wipeout."
On the black leather and chrome-styled executive floor, glass-walled cubicles are sparsely furnished and hung with plasma screens, boasting none of the couchy-cosiness on which some creative companies thrive.
Kreiz's executive career began in serviced offices near London's Trafalgar Square, where he was parachuted in 1997 to deliver on Haim Saban's gamble to extend the Fox Family brand to Europe.
From a rented fax, phone and photocopier, Kreiz signed multiple distribution deals, pumping out the critically dubious "Mighty Morphin Power Rangers" and "Teenage Mutant Ninja Turtles" across Europe under the Fox Kids banner.
Kreiz's specialty was to show up solo for meetings, sitting across a table from up to 10 lawyers and taking on all comers. Former colleagues recall a high-octane culture.
"He liked energy people with spark, who had ideas and weren't afraid of him," says Ollie Head, an associate producer on "Britain's Got Talent." Head's first job was in the Fox Kids mailroom, before Kreiz offered him a move into production.
"In television you see how many people use the hierarchy to step on the little guys," Head says. "Ynon never did that. If he saw someone he thought was worth it, he liked taking a chance."
FKE became the fastest-growing pay TV channel in Europe, eventually selling to Disney as part of a $5 billion deal for the Saban/News Corp. venture Fox Family.
While the era of buoyant markets and cheap debt suited high-growth businesses like Fox Kids, succeeding in a brutally tightened investment climate will be tougher job.
"It would be reasonable to assume the debt structure and refinancing is too onerous for the current market conditions," says a buyout specialist at one of Europe's biggest investment banks. "It will be interesting to see what happens when the covenants begin to bite."
Before delisting, Endemol posted earnings of $233 million on revenue of $950 million. The 2009 growth target was almost 50% up on that. The impending $97 million loss of Endemol's U.K. contract for "Big Brother," a likely downward negotiation on "Deal or No Deal U.K." and a slew of chunky bonus payments will only add to the pain.
Charles Allen, senior adviser to Endemol shareholder Goldman Sachs, insists the situation is well under control.
"Clearly the market is much tougher, but the investors were able to get a whole series of covenant-light loans, so there is less pressure on Ynon than you might think," he says. "The shareholders see this one as a long-term build."
The addition of program sales, scripted programming and distribution operations -- Endemol's own and third-party -- are part of that architectural project.
"There's no formula. You can't just manufacture hits."
Creatively, the challenge is more subtle. Kreiz has to evolve a culture that allows original ideas to propagate across a group of companies that have no real tradition of working together. His task is not made easier by creative egos that insiders characterize as "in need of constant stroking."
In April, Kreiz put an additional $20 million to work boosting the company's creative engine, nurturing local teams and partnerships. "The temptation with Endemol is to think that it all needs centralizing and globalizing," Endemol U.K. CEO Tim Hincks says. "Ynon's great strength is that he has not fallen into that trap."
Hincks credits cooperation with Endemol USA head David Goldberg as the genesis for formats including "The Whole 19 Yards" for ITV1 and "Someone's Gotta Go" for Fox.
Nonetheless, Kreiz's detractors file a pretty consistent charge sheet. Bluntly put, they say the producer lacks the creative firepower of its glory days, and believe only a hitmaker at the helm can renew its success. To critics at least, the ghost of maverick co-founder John de Mol still stalks the halls.
"John is a creative genius, no question," Kreiz says. "But in the past, running a central creative unit worked because the company was smaller. Now, with 6,500 employees, it has to be more diffuse."
It's the job of chief creative officer Paul Romer to conduct and orchestrate the ideas coming from Endemol's 15 creative hubs. But Kreiz is candid about the challenge. "There's no formula. You can't just manufacture hits. But you can create an environment that stimulates creativity and original ideas," he says.
So does Kreiz -- for all his growth-engineering savvy -- have what it takes to run an ideas company?
"Very few people have both commercial skills and the ability to manage creative people, but Ynon is one of that few" says Goldman Sachs' Allen, a former CEO of Britain's ITV.
Endemol U.K.'s Hincks contends that Kreiz possesses the ability to inspire. "You want to be on his team. You want to go with him. It's an interesting quality to have."
Anthony Fry, senior partner at boutique investment bank Evercore Partners, agrees.
"It's a tough assignment, particularly in the current climate. Don't write Kreiz off just because he is not a creative. He is uber-smart, totally committed, and people want to work for him," Fry says.
Kreiz seems unfazed -- even energized -- by the scale of the challenge. "I'm excited to be part of a new chapter for Endemol. We're a big company already, a whole universe. But I still feel that within us we have the capacity to become much, much bigger," he says.