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    Read about how PCR have made things better

“PCR proved yet again that they were able to profitably manage the business, and craft a sale that provided value for stakeholders in what was a commercially and technically difficult situation.”

Stewart Perry – Clyde & Co

The Situation.

This UK TV production company made innovative content for the domestic market. Blue chip clients included ITV, the BBC and SKY and the business model was based on a core creative team developing programmes through to commissioning, production and broadcasting. The company earned its money from “production profits” (i.e. the money paid for each programme less the actual cost of producing it) and associated worldwide license/royalty fees.

The company had been profitable since exception but aggressive cost cutting by the broadcasters led to the industry increasingly relying on tried and tested formulas, extended series runs and reality TV formats led to both deferrals and a dramatic reduction in new commissions throughout 2013. The board reached the point where the timing of any prospective future commissioning income was uncertain and insufficient to meet ongoing operating costs. PCR were asked to advise the board, particularly with a view to an optimized exit.

The Process

At the time of our involvement, the sole commission in production was an 8 episode series for the History Channel called Ultimate Wheels, a car restoration show. Principal filming of the first three episodes had been completed but only a fraction of production costs had been paid over and the majority of the production team were self-employed and owed money for their services to date.

We quickly identified that there were two likely outcomes; we could either:-

a) abandon the project, make the employees redundant and dismiss the production team who would suffer substantial personal loss. In addition the estate was likely to suffer material damages claims from the Broadcaster for non delivery of the completed episodes, or

b) negotiate with the History channel for completion of the series on terms that provided a net benefit for the estate and delivered a completed TV series (together with quality assurance sign-off and appropriate legal clearances) to the Broadcaster.

The Outcome

On the day of their appointment PCR made immediate contact with the History channel and secured an urgent meeting on day one. A presentation was made to the channel’s commissioning, legal and finance executives explaining the net commercial and reputational benefit of retaining the production company (albeit whilst in the control of the administrators) to complete the series, and how that process would be controlled and funded.

After 24 hours the broadcaster agreed to the proposed terms and made the advance upfront payment required to secure continuation of the production.

The net result was as follows :-

  • A successful 9 week trading period, including location filming and post production activities
  • All 8 episodes completed and approved by the Broadacaster
  • All contractual terms met resulting in net profit to the estate £130k, plus mitigation of £480k damages claim.
  • Minimal financial loss to self employed production staff.
  • 9 week platform for retained staff to secure alternate employment
  • Discrete sales of TV library, existing royalty stream and pipeline
  • 100% uplift in dividend to the unsecured creditors

PCR Logo HomeCan we help you?

Businesses of all sizes, operating in every sector, will at some point be faced with circumstances that threaten their future. PCR provide specialised advisory services for business rescue, transition, exit or winding up. 

  • Ambitious companies seeking to grow can benefit from discreet expert advice and assistance in planning and executing organic or acquisitive expansion. Our extensive business and finance network can deliver significant opportunities.
  • Companies trading under difficult circumstances need our specialist advice and services, helping Directors to fully understand their responsibilities to investors, creditors and employees when working to turnaround a struggling concern. PCR always try and rescue an ailing business and have a proven track record in business recovery.
  • Business owners or shareholders seeking to exit or close a solvent company in the most advantageous and tax efficient manner should contact PCR for discreet and confidential advice.
  • Cash flow is the life blood of every company and bad debts or inefficient credit management can lead to business failure. PCR deliver highly effective debt collection and management services.

PCR do not have a magic wand to cure a poor balance sheet, but we are here to provide discrete sympathetic advice on individual responsibilities under law and the best strategies moving forwards. We are not interested in apportioning blame, rather we are here to try and fix things, and the earlier we are consulted, the better the options for recovery. Even if you are experiencing a temporary downturn and hope to trade yourselves clear, you must seek advice, or it is possible that should things go wrong you may be exposed to personal liability.

In short, if you have even the slightest doubt about the health of your business there is nothing to lose from talking to PCR. It won’t cost you anything to gain an independent view of your situation. Even when the outlook is bleak, contacting PCR has often marked the moment when our clients are able to start looking forwards in a positive manner.

Contact PCR for swift and confidential advice ››

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