The agreement, dubbed “the first of its kind” and “groundbreaking” by advisor ACF, securitizes the intellectual property behind Got Talent, including the US, UK, and international versions of the format, which is available in 72 territories worldwide.
Production margins and fees, digital income, franchise, and original content sales, and sponsorship income have all been bundled together as securities.
This deal structure is more commonly used in the music industry for royalty income streams. In general, it is used to raise capital via equity, debt, or a mixture of the two.
As a result, ACF claims that the two-year-long deal provides Syco with a war chest to “grow the business through a mixture of strategic acquisitions and organic growth projects.”
ACF served as the lead bank, advising Syco in both the UK and the US. Simon Cowell’s Syco Entertainment was advised by Memory Crystal, a multidisciplinary international law firm based in London.
Thomas Dey, ACF’s Founder and CEO, said: “ACF worked with Syco to formulate this financial strategy to support its plans and managed the entire process as the lead bank.
Our brief was to create a structure to enable the Company to maximize the full potential of its existing passive royalty income stream.
ACF has created a winning formula using our extensive experience across the media and entertainment sector. We are certain that this ground-breaking structure will be one that we will use for many media formats in the future.”
Syco made widespread layoffs earlier this year, with Cowell reportedly wanting to spend more time with his family at the time. It remains to be seen how today’s news will affect that plan.
Following the summer’s news that Channel 5 was in pole position to strike an agreement, UK reports over the weekend suggested ITV had stepped in to nab an expected British relaunch of The X Factor.