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BoI looking for a slice of the Big Apple’s media action Back  
Since it set up a media finance team in 2005 after hiring an already successful team from Barclays Bank, Bank of Ireland’s media operation has gone from strength to strength. Bill Greaves talks to Ronan O’Connor about the experience of establishing Bank of Ireland in the sector and the challenges in this competitive sector.
Since he joined Bank of Ireland in 2005, Bill Greaves and Simon Bumfrey, Tony Tozzi, Geoff Marchant and Mark Birkenshaw who joined him from Barclays, have grown the media finance department to be one of the top three banks in the UK in the sector, with the main competitors being Barclays and Royal Bank of Scotland. For a bank the size and standing of Bank of Ireland to be in the top three in the UK in any sector is a ‘terrific place to be,’ according to Greaves.

For the former Barclays team, setting up with Bank of Ireland was a perfect match. It gave them a ‘blank canvas’ to further the deals they were interested in and the bank gave them backing to pursue deals in other markets, as can be seen by the establishment of a media finance office in the US. ‘It was the chance to work with a blank sheet of paper. We were very impressed with the entrepreneurial nature of the business that was being proposed,’ says Greaves.

The media finance team has a very broad remit, according to Greaves, ‘we can lend to any media firm, and we mean media in the broadest sense – that goes from paper publications, TV, radio, film, as well as ancillary services to films. We will lend amounts from E20 million up to E1 billion, but we like to back private equity and corporate deals as that is what we know best.’

And the team also like to concentrate on a few key areas for investment. Areas that they know well, and where they see opportunity. The team primarily focuses on the print publishing arena (this includes national newspapers, magazines, regional press), music publication(the team has organised six deals in this area in two years, making it the leading UK bank in this sector), and radio (this is a sector that is in a period of consolidation).

A highlight for the team in the print publishing sector was the successful completion of the AIM listed Mecom Group Plc’s E930m acquisition of Orkla Media Group. The strong relationship developed between Mecom and Simon Bumfrey on the media team has resulted in Bank of Ireland being involved in every transaction that Mecom has undertaken as it rolls out its acquisition strategy across Europe. The Orkla deal positioned Mecom to as the leading pan-European newspaper publishing business with operations in Norway, Denmark, The Netherlands, Germany, Poland, Sweden and the Ukraine.

He points out that this is a high starting point for transactions, and as a result there are relatively few media firms that the team can deal with in Ireland. So the key focus of the team is the UK, and certain territories in Europe - in particular Germany, France, Benelux and Scandinavia.

And although the media finance team has only been operating for two and a half years, they have already committed E1.25 billion in financing, made up of over 45 transactions. This level of activity has led the team to the top tier of the sector in the UK, mainly thanks to an existing set of contacts in the industry.

Having brought their vast experience to the table when the Bank of Ireland team was set up, Greaves and his team could get to work straight away. At that time they all had between seven and 10 years experience in the business, a major asset when approaching customers, according to Greaves.

When they joined Bank of Ireland the team consisted of five people. This number has now grown to 21. Four people are operating in the US, three of whom work in the film finance office in Los Angeles with one person in New York. The remaining 17 are based in the UK, four work on UK films and 13 work on corporate media, three of the 13 work on sourcing business in Europe.
‘We understand the sector – we know all the main UK players, the future and the history of the market. We have the ability to tailor a number of specialist products to suit clients’ needs – we have designed have special tax structures for film, and can arrange finance for TV or music publication with its own structure. In addition to this, with our experience, we offer clients great networking opportunities. We know many of the people in the business whom our clients would look to deal with, so that is added value we can bring to the table.’

Having established a successful platform in the UK during the last couple of years, Bank of Ireland has now set their sights on the ‘media capital of the world’, New York. In the media business alone, there is $270 billion transacted per annum, so it made business sense for Greaves and his team to focus on the Big Apple, especially when Bank of Ireland already had an existing leveraged finance office set up there.

‘New York is the biggest media market in the world. Having said that, it is also a highly competitive market. One in five of deals in New York are media related. We could have entered the market from the UK and managed any deals from here, but there is nothing like having a person on the ground. So we decided that it made sense to open up an office there working with the existing leveraged finance team,’ said Greaves.

Greaves says that part of the success of the media team in launching in the US is the incredible brand recognition that Irish banks have over there. Many business people with Irish roots have an affinity to be doing business with an Irish bank. However, Greaves recognises that Bank of Ireland are only a fledgling player, and would be happy to take a fraction of the market.

Despite the motivating factor behind the scale of business in the States, Bank of Ireland would not have backed the project if they did not have the right person to head it. Chris Mangan is the managing director of media in the US. He joined Bank of Ireland from GE, and has 10-15 years experience in the US media market, and without him, the venture would not have gotten off the ground, says Greaves.

Another key incentive to entering the US market was the leveraged finance team, which has been in the US for over six years, and a possible expansion to the States was discussed when the team joined Bank of Ireland initially.

‘We just felt that the timing was right. Our business is in great shape and we have already considerably developed our team in the UK. Our growth is good, we already had a presence in the US with the leveraged finance team and we found the right person in Chris Mangan,’ says Greaves.

It is hoped that the media team in New York will have five staff by the end of the year, and in three to five years time grow to the US business to a size where it can match the E20 million plus annual profits of the European operation.

Bank of Ireland’s media team is well placed to expand, even when the wider industry is currently experiencing general uncertainty.

That is not to say that everything is perfect in the sector. The conventional advertising revenues from TV and radio are suffering as the impact of internet advertising becomes more and more apparent. However, there is still a positive outlook, and moderate growth is the norm. ‘A growth rate of 2-3 per cent in the sector is fine by us. There are no real signs of an advertising recession, and of the 45 plus deals we have on our books, there is nothing there that would concern us,’ Greaves adds confidently.

‘The regulated nature of the media sector tends to create opportunities for finance, especially when regulation can be different in different countries. Also, as the regulatory environment is constantly evolving, new opportunities can occur - an example of this is the opportunities which arise due to the opening up of digital licences.’

In fact the media finance sector has grown significantly since it started up. To the point that it now accounts for 5 per cent of Bank of Ireland’s Corporate Banking income. ‘If you consider that the team is only going for two years and was set up from scratch, it is an excellent bit of business for Bank of Ireland. It also shows that there is a possibility to further grow the business by investing in other specialist areas,’ says Greaves.

Looking back, Greaves still feels that the first deal he did for Bank of Ireland, when UTV purchased the Wireless Group, was his proudest moment. ‘That deal was a perfect fit because it was an Irish asset in the media. It got us a lot of good publicity. We did the deal in 48 hours, something which has never been done before and never will be done again. It is the deal that out us on the map and the one deal we would be most proud of.’

For the moment Greaves and his team are happy to focus on existing markets, but will be looking to expand again soon. ‘Beyond the US, in two or three years time, who knows we may have a presence in the Far East, Dubai or Australia. In 2009 an opportunity like that would look interesting,’ he adds.

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