Sagafilm adds another spoke to Skybound's wheel

In a contracting market, US multiplatform company Skybound Entertainment and Icelandic producer Sagafilm have found like-minded partners to fuel new growth for their respective businesses.

At a time when the international television industry is in a period of contraction, as cost-cutting measures target both staff numbers and series budgets, Skybound Entertainment has chosen to expand its film and television reach into Europe for the first time.

The Walking Dead producer is known for its multimedia approach to content, with more than 150 properties in its library that it seeks to adapt in numerous ways according to its unique business model, dubbed the ‘Wheel of Awesome,’ where a television series can be reimagined as a board game, comic book or live event, for example.

So the deal to acquire Icelandic producer Sagafilm (The Minister, Stella Blómkvist) means it is now expanding that library further with a view to applying the wheel to those series and a film catalogue that have established the company as a leading player in Nordic television.

However, the acquisition isn’t a straight deal. Skybound has jointly picked up Sagafilm with its game publishing partner 5th Planet Games (5PG). Skybound becomes the majority owner of Sagafilm, with 5PG picking up a minority stake. Financial details were not disclosed.

The move marks Skybound’s first steps into Europe for its television operation while building on its Nordic presence following its US$10.5m investment in Copenhagen-based 5PG in September 2021.

Another player in the deal is Beta Nordic Studios, part of German producer-distributor Beta Film, which acquired a 25% stake in Sagafilm in September 2020 and will retain its shareholding.

Sagafilm executives including managing partner and Sagafilm Nordics CEO Kjartan Thor Thordarson and chairman Ragnar Bjorn Agnarsson will continue in their roles. Former Netop Films exec Tjorvi Thorsson has been named as the new CEO of Sagafilm Iceland and all three will become partners in Skybound Entertainment and 5PG.

The deal has been built on the long-standing relationship between Thordarson and Rick Jacobs, Skybound’s managing partner of linear entertainment. They have developed projects together in the past and Jacobs sees the acquisition as a chance for Skybound to build on its previous investment in Scandinavia via 5PG by moving into film and television in the region.

“We definitely will be feeding our IP into Sagafilm to adapt as European television, both in the Scandinavian languages and English language, and vice versa,” Jacobs told C21. “As we look to expand the volume we’re doing on the originals side, we hope we can use both the new commissions Sagafilm has coming and also delve into their library to expand Sagafilm beyond just film and television into all areas of media.”

Skybound is also seeking to tap into Sagafilm’s production services operation, which has grown as Iceland has become a popular filming location to global productions, which benefit from the country’s generous 25% tax rebate for film and television production costs incurred in the country.

“Iceland is a huge piece of this for us,” Jacobs continued “When we think about some of the best genre content that has been made over the last decade, it’s been made in Iceland, whether they’re Sagafilm originals or shows Sagafilm has done service work on.

“Particularly in this market of contraction, where there’s going to be downward pressure on budgets, where are you going to get production value for genre content at the same level that you had before? For us, going to Iceland is a big piece of that. We see a lot of potential in Iceland. We see a lot of potential doing production in Iceland with our own original productions, Sagafilm productions and coproductions we do together. All of that is going to lead to the growth of this partnership.”

With the acquisition, Sagafilm brings to Skybound a slate of content that includes series such as The Minister (RUV), Sisterhood (Viaplay), Stella Blómkvist (Viaplay), Thin Ice (TV4) and Case (Netflix), as well as feature films Operation Napoleon and Cold Trail. Sagafilm has also established itself as a production services company in Iceland.

For Sagafilm, the deal opens up the opportunity to access Skybound’s IP archive, digital partner platforms and the chance to upscale their own back catalogue through Skybound’s Wheel of Awesome.

“For us it’s all about the ambition of making things for the European market. I think Skybound is a very natural fit for us,” Thordarson told C21. “I am very excited to join Skybound and 5PG on a creative level. Their approach is something that we have been exploring on a micro level in our home market, and now we have a partner that enables us to reach audiences and fans around the world for our IP.”

Part of that approach will be tapping into 5PG’s game publishing business, which now has the chance for natural expansion of its video game roots within the Nordics and Europe. “Gaming and film are getting ever closer in the context of creating entertainment content, and their expertise in mobile gaming is something that will add a new dimension to what we can develop with our existing IP,” he said. “In general, the multi-platform opportunity is very exciting to me.”

5PG CEO Mark Stanger said: “We are excited that this acquisition will bring significant diversification to our shareholders beyond games, as we embrace Skybound’s innovative Wheel of Awesome model and expand into film and TV in the Nordics. By leveraging Sagafilm’s expertise and industry reputation, we are poised to make a significant impact in the European entertainment landscape.”

The Skybound takeover represents the completion of a 10-year project for Thordarson, who said the company set out a decade ago to make Sagafilm a major player in the European market.

Its acquisition, now, “is a logical step in having backing to aim even higher,” he said. “The Icelandic film industry is able to compete on a global level when it comes to quality of the content and production quality. We feel this is the right time.

“Sustainability is the largest single challenge in our industry. Only the strongest will survive the downturn that we are experiencing. Small businesses will struggle alongside the struggles of the buyers in the market. We really like how Skybound sees the state of the industry as an opportunity; we want to be aligned with people that can turn the tide with another business plan than the typical production company has. We believe the approach of Skybound is the way forward in a very tough environment.”

With Beta Nordic Studios maintaining its own share in Sagafilm, which was founded in 1978, Jacobs says he hopes to continue expanding the producer’s originals slate while also tapping into Beta Film’s distribution network where appropriate.

“They seem very excited about the opportunity to be a partner,” he said. “It might open up some more conversations between Beta and Skybound on some of Beta’s IP as well. We definitely had that conversation in the process of building this partnership.”

Thordarson said: “This deal will give Beta Nordic Studios an even better opportunity to participate in large-scale European projects. We at Sagafilm are collaborating with other companies within BNS and we will continue to do that.”

Justus Riesenkampff, executive chairman of Beta Nordic Studios, added: “We welcome Skybound as an investor as they are an experienced player with a great IP catalogue and they value the European way of financing and producing high-end drama.”

The acquisition of Sagafilm continues the expansion of Skybound, which was just 50 people strong when Jacobs joined and now boasts a staff closer to 200. Last May, the company – whose slate also boasts titles such as Prime Video series Invincible and podcast Impact Winter – announced it had raised an undisclosed amount through venture capital investors including Knollwood Investment Advisory, Skydance Productions and Hiro Capital.

That preceded a Regulation A+ offering, unveiled earlier this year, that gave fans the chance to invest directly in Skybound. The offer will close this Friday, with more than US$16m crowdfunded to date. A follow-up campaign available to people in the UK and Europe will be launched through equity crowdfunding platform Seedrs in the coming weeks.

“The process of expanding our resources has been primarily about fans and figuring out how we can get in touch with them more directly and giving the core fan the opportunity to be able to access content in a way they’ve never been able to before,” Jacobs said. “Using that to fuel growth through M&A activity is a big part of it. That M&A activity leads to more content, which leads to more delivery for our audience. It’s definitely all part of the plan.

“That expansion and the track we’re on is only going to continue. We are not, at this point, a company that’s finding the macro-economic factors are something we’re concerned about.

“Whether it’s the success we’re having with Invincible, the continuing success we’re having with The Walking Dead or new IP like Impact Winter we’re bringing to market from the audio space, we’ve had our best year on record last year, we’re on track to do as well or better this year and next year looks even rosier. It’s the same with Sagafilm and we felt that by combining forces, we could unlock even greater value.”