Boomerang + PLC

Origins

There were four major motivators in setting up the company, namely a passion for programme creation, a desire to have more control over the production process, spotting a gap in the market for our style of programme making, and the confidence in our business approach to deliver in an evolving media sector. In the initial period of establishing the company the major challenge was converting core beliefs into cash income and creating the trade and growing a cash-flow to keep the business developing. As is true for most new business, securing the confidence of customers as trusted suppliers was critical and proving Boomerang could deliver the goods to specification, on price and in time. Finally, keeping the order book filled to plan while avoiding the temptation of over-stretch and being distracted by opportunities outside of the core business plan.

Success Factor

The Broadcasting Act 1990 made law that all public service broadcasters commission at least 25% of their output from the independent sector. This means, that as the UK’s two largest programme producer/broadcasters, the BBC and ITV (and their regional subsidiaries) are now statutorily obliged to farm-out a minimum of a quarter of their programme production (by price and quantity). This is in addition to S4C and Channel 4’s role as 100% commissioning broadcasters. Also, with a tendency towards London-centric programming, broadcasters are also obliged to ensure that a minimum of 25% of their production come from outside of the M25. Advances in broadcast technology have seen a proliferation in digital television channels and the development of the internet as a video outlet. With this have come far more windows of opportunity to exploit programmes and their associated rights. However, due to their commissioning terms of trade, all the major public services broadcasters - BBC, ITV, C4, five and S4C – retained the exploitation rights and associated revenues of programmes delivered to them from the independent sector. This was until Communications Act 2003 which recommended a new approach to terms of trade. These new terms provide independent producers with a real opportunity to retain and exploit rights in their programmes, enabling companies to invest in future programming and build their businesses. The new terms fundamentally change the way broadcasters acquire programming from independent producers, moving to a limited licence of primary broadcast rights with producers retaining control of the exploitation of the rights in their programmes. The accumulative effect of these changes to the broadcast landscape has been accelerative; increased corporate finance activity (mergers, acquisitions and alliances) as businesses start to recognise the potential increased profitability and financial viability of the sector. It is these changes that Boomerang has utilised through re-investment and external finance to expand the company though strategic organic growth and corporate acquisition.

The Future

Following Boomerang’s admission to AIM in November 2007, the plans for the business are to continue to grow both organically and by acquisition in order to become a more diverse, broader based media group with strong Welsh roots.