European media giants team up for online video venture

German media group ProSiebenSat.1 has joined forces with French and Italian counterparts TF1 and Mediaset to forge a partnership in the online video sector.

Mediaset and TF1 have invested in ProSiebenSat.1’s premium multi-channel network Studio71 by way of a capital increase. Mediaset has taken a stake of 5.5 per cent with TF1 gaining a 6.1 per cent interest in a deal that grants Studio71 a company valuation of approximately €400m ($418.8m). ProSiebenSat.1 retains about 70 per cent of the shares in Studio71.

All three groups hold a substantial portfolio of sports rights and the partnership represents their first major collaboration. As part of the transaction, ProSiebenSat.1 has agreed to acquire a strategic minority interest in Finder Studios, a French premium MCN co-founded by TF1.

The investment in Finder Studios is subject to approval by the German Federal Cartel Office and the Austrian Federal Competition Authority. Furthermore, ProSiebenSat.1 and Mediaset have agreed to found a joint venture, which will roll-out the Studio71 business model in the Italian market.

The new investors will support Studio71 in tapping into additional markets alongside Germany, USA, Canada, the UK and Austria. As part of the partnership, the appropriate infrastructure will now be set up in France and Italy in order to promote Studio71’s business in the two markets.

Christof Wahl (pictured), member of the executive board for digital and chief operating officer of ProSiebenSat.1 Group, said: “The partnership with TF1 Group and Mediaset gives us access to key European markets where the online video market is just now really picking up momentum and promising significant potential. With the united marketing power of our media companies, we have an attractive ecosystem with which we can generate additional income and continue Studio71’s digital success story.”

Studio71 was founded in 2013 by Sebastian Weil and Ronald Horstman, its managing directors, and has around 500 million video views a month in the German-speaking region. By acquiring a majority stake in the US network Collective Digital Studio, which now also trades under the name Studio71, the MCN reaches about six billion video views a month.

Olivier Abecassis, vice-president of innovation and digital at the TF1 Group, said: “This deal is absolutely in line with the strategy being driven by TF1's CEO Gilles Pélisson, and with the group’s new ambitions in digital. By taking a stake in Studio71, the TF1 Group is positioning itself in the global digital ecosystem alongside two of Europe’s leading media groups.”

TF1 Group and Mediaset are members of the European Media Alliance, a media network of leading European broadcasters, initiated by ProSiebenSat.1 in 2014 to create common synergies and investment opportunities.