DUBAG’s one-time ownership of MMC Studios helped inform its move for Eurovision Services as it taught the private equity company about the complexity of the broadcasting services industry, partner Emanuel Cattanei told PE Hub Europe.
LEO II GmbH & Co KG, the investment fund advised by DUBAG Group, acquired Eurovision Services from the European Broadcasting Union (EBU) in mid-February.
Based in Geneva, Switzerland, Eurovision Services is a media services provider for media organisations and sports federations around the world. It has offices in North America, Europe, the Middle East and Asia, and employs around 250 people. Among Eurovision’s biggest customers are sports federations and right holders, namely UEFA, Formula 1 and the NBA.
DUBAG is not completely new to the scene. In 2013, the Munich-based firm acquired MMC, a TV and film studio company based in Germany. MMC was sold to the to the private equity investor Novum Capital and broadcasting and e-sport specialist Crosscast in June 2019.
“After a while, you see where each player lays,” said Cattanei. “I think they’re all really interconnected. Some of Eurovision’s customers are also their competitors, and service providers.”
The experience of owning MMC, especially around live TV, is what Cattanei believes made EBU more confident that DUBAG was the right choice for Eurovision.
“The first approach will be focused on carving the company out, because if we were to look for bolt on acquisitions onto an unstable platform, I think we’ll get into trouble,” said Cattanei.
DUBAG aims to turn Eurovision into a “real, standalone” business that has its own control of IT, finance and other services, as at present, the company is still interlinked with the EBU.
Cattanei described the Eurovision acquisition as somewhat opportunistic in terms of the sector, but said otherwise the company was the perfect fit for DUBAG’s investment criteria. The Munich-based investor focuses on special situations, while carve-outs from large multinationals are a typical target.
The MMC investment also taught DUBAG about technology’s starring role in the industry. The broadcasting sector continuously sees new technologies coming into the market, according to Cattanei. “Of course, you never know which one is the one that’s going to stick,” he explained. “You always have to make sure you’re not over investing into one technology, and then you find out that that’s the wrong one. That’s driving a little bit of a change.”
There are also “classical barriers” between various providers in the industry, as they try to move into sectors outside their own. ”The rights owner might say: ‘I can do some of the services myself, I’m not just selling the rights to Champions League, but I’m also able to provide other services, like production,” Cattanei explained, using the premier European football club competition as an example.
Past the carve-out process, Cattanei is keeping his eyes open for possibilities. A further international expansion could be on the cards, but that raises many questions for DUBAG to consider. “Could we capture more sports games in Asia? For sure,” said Cattanei. “But there is always the question, does it make sense for a European company to move staff and equipment over to Asia?”
While DUBAG has yet to focus on a future exit scenario, Cattanei believes there will be a “lot of scope” for it in the future. “At some stage, we will put the asset on the market again,” he said. “Once it’s on the market, it’s a nice, safe and clean add-on on for someone.”