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The superindie view

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16 March 2011

Interview: Steve Morrison has presided over the phenomenal growth of All3Media, from blank sheet of paper to the UK’s largest production group. But what’s next for the indie sector’s biggest consolidator?

Steve Morrison is midway through explaining how All3Media grew to become the UK’s largest ‘superindie’ production group, when a colleague steps into his glass panelled office and hands him a piece of paper. “Very interesting,” says Morrison quietly as he scans a news report saying that rival superindie Shine Group has just sold to News Corp for £415m, before speculating aloud about the financing of the deal.

It’s little wonder that the news is so interesting to him. Confirmation of the Shine/News Corp deal comes just as All3 is itself the subject of intense speculation that it is about to be put up for sale by its private equity owner Permira.

Morrison himself gives the All3 sale rumours short shrift. “It’s too premature. We haven’t hired [an investment bank]. At the moment we are concentrating on growth,” is all he says on the subject.

The All3 story is, indeed, one of incredible growth – from a blank sheet of paper in 2003, via a breathtaking series of acquisitions, it is set to turnover more than £450m this year. This, though, has come at a big cost: All3 has bank debts of £256m on earnings of £50.5m.

It began back in 2003, soon after Morrison quit as chief executive of Granada Media Group in the wake of the £1.3bn ITV Digital debacle. Instead of bowing out of the TV business, Morrison teamed up with former colleagues David Liddiment and Jules Burns to found All3.

“David Liddiment said there is no point starting our own production company – we are just far too old and it will take us years to get up and running,” recalls Morrison. “But, he said, doesn’t the independent sector now need a group?”

Backed at that time by private equity group Bridgepoint, All3 then went on a major buying spree beginning with Chrysalis for £45m. It now owns 20 companies, predominantly in the UK, but also in the US, Germany, Holland and New Zealand.

Since the very beginning, All3 has followed a federal model, allowing its indies creative autonomy and their own identity. It’s a model that Morrison learnt at Granada, when it acquired LWT, United and Yorkshire. “Matrix management” is the way he describes it. “You want the companies to be as self reliant and as strong as possible – we chose them because they are that type of company.”

He says this self-reliance is “All3’s secret weapon”, making it the very opposite of a centralised top heavy organisation that stifles widespread idea creation. There might be 200-300 formats swirling around All3’s companies at any one time, he says. It’s then the job of a central team at All3 including Liddiment, Ruth Wrigley and Wayne Garvie and All3Media International “to capture all this creativity and magnify it as best we can to help the companies get their programmes around the world.”

Morrison and his senior team also hold a “long and very detailed strategic meeting once a month with each production company to discuss and outline strategy. “We debate the strategy. It is theirs to do, but ours to listen and counsel.”

Despite paying millions to acquire each indie, no company boss has left since their big paydays, insists Morrison. “Everybody asks us this question: if you pay quite a lot of money for a production company to a relatively small number of individuals, will they all go off to the golf course?” He says it hasn’t happened because each outfit is run by creative entrepreneurs who remain proud of their companies and shows.

In fact, he maintains that it is All3’s support and central expertise that has helped outfits like Maverick “grow by 400% in a short space of time” or Company crack the American market with a US version of Skins for MTV. “We offer the companies the opportunity to grow, but with the backing that perhaps they would have found more difficult on their own.”

The US is a key target for growth in the coming months, with All3 aiming to double output there to $100m this year. Six All3 outfits are now producing in America, each with their own offices and set ups rather than one centralised American group.

The focus on America is crucial, he says. “My view is that the UK is a fantastic springboard – you can’t be a great exporter without a strong home market. But America is a magnifier, a megaphone of your idea which then sends a louder signal about being successful around the world.”

Morrison describes All3 as ’50-50’ UK and international. It’s clear that, in the face of a stagnating home market, he’s sees international markets as key to All3s future growth.

And it’s this growth that he clearly expects will help All3 offset the tremendous debts it has built up through its acquisition spree. “As long as you are growing – and this year we are hoping to go back to double digit growth, having very successfully survived the recession – the banks support you because they can see what you are doing with their credit.”

CV
Started as a radio producer with BBC Scotland.
In 1974 joined Granada, rising to director of programmes in 1987 and md in 1993.
Md of LWT (1994).
Chief exec of Granada in 2001.
Formed All3 in 2003 with David Liddiment and Jules Burns after the acquisition of Chrysalis TV.
All3 now comprises 20 companies including Company Pictures (Skins), Studio Lambert (Undercover Boss), Lime Pictures (Hollyoaks), Lion (Horrible Histories), Objective (Peep Show) and Optomen (Kitchen Nightmares).
All3 was initially backed by private equity firm Bridgepoint Capital, which sold its stake to Permira in 2006.

(This interview is taken from the March issue of Televisual magazine)

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