Kew Media was one of the more prominent companies at NATPE January 2019. There was a lot of buzz around their efforts and capabilities. By NATPE Jan 2020, there was a strong concern about their operations.
But now, a month after NATPE, Kew Media Group (KMG) has collapsed.
“The global producer-distributor’s eight directors resigned, scores of others lost their jobs, and the company will now be stripped of its assets. For insiders caught up in the wreckage, the post-mortem has begun on how this still-young company unraveled, taking down with it a profitable UK distribution arm that had a library boasting some of the biggest TV shows of 2019.”
KEW was highly aggressive in its acquisitions and pushed their cash flow to the limit.
“The one that was disastrous was Essential because they paid a lot of money and they lost a couple of really big contracts just as they bought it. That was the turning point,” added another source. A third person said CFO Webb made clear prior to the Essential deal that KMG would need more investment to safely finance the takeover. The company did amend its Truist-backed credit facility, but the source said this did not prevent cash issues later emerging within the group. Essential CEO Greg Quail declined to comment.
A media company, as noted in the article, is usually a collection of companies and independent producers. If a media company has too much of a corporate hierarchy i.e. ABC, Warner Brothers, etc., then the company does not function in a nimble manner. Not flexible, not seeking immediate and open opportunities and more. The entrepreneurial inclined producers and creatives flounder in this atmosphere. In many ways, the function works like a military operation with a firm command structure – but the boots on the ground doing the job as they see fit while maintaining the Mission. Command Structure+Flexiblilty. But KEW did not do that.
“Those familiar with KMG’s operations also highlighted the unorthodox way it was run as a collection of companies. The model of many sprawling production groups sees indies sharing back-office functions, such as legal, finance and HR, while the creatives in charge maintain a level of independence. It’s a simple principle that can generate important cost savings. But KMG insiders said there was very little in the way of shared resources and expertise between the group companies. “They glorified in the fact that these indies were on their own,” said one person. Another added: “Apart from an early meeting in Toronto, there was no real effort to bring together creatives to solve development issues or share best practice on things like winning commissions in the U.S.”
You can read the full story here.