Rupert Murdoch's 21st Century Fox and the private equity firm Apollo Global Management have entered into a preliminary agreement to create a joint venture consisting of several leading television production companies, people familiar with the matter said.
Under the proposed terms, the joint venture would manage 21st Century Fox's Shine Group as well as the Apollo-controlled Endemol and Core Media Group, which are run as separate companies.
The combination would create a global television production juggernaut with shows ranging from "American Idol" to "The Biggest Loser."
Although a tentative deal is in place, executives close to the talks who requested anonymity because of the sensitive nature of the situation, cautioned that a final agreement is no certainty. Spokespeople for 21st Century Fox and Apollo confirmed the talks.
The potential partnership comes at a time of intense consolidation in the production industry, particularly among firms that specialize in unscripted shows. Last week, Discovery Communications and Liberty Global reached an agreement to buy London production company All3Media in a deal valued at $930 million and Britain's ITV agreed to acquire 80% of Leftfield Productions for $360 million.
For Apollo, teaming up with 21st Century Fox is the latest step in its efforts to become a force in the programming business. In 2011, it bought the company CKX, now known as Core Media Group, for $509 million. Core is a producer of "American Idol" and "So You Think You Can Dance," both of which air on Fox.
In the last three years, Apollo has acquired majority control in Endemol, the Amsterdam production giant whose shows include "Big Brother" and "Deal or No Deal." Endemol makes more than 15,000 hours of programming every year and has a library of more than 2,000 formats.
Apollo has been looking to combine its TV production holdings as well as find a partner to help its global ambitions. In 2012, it flirted with putting Core and Endemol under one roof in a deal that would have also included an investment from Hollywood heavyweight Peter Chernin. But those talks eventually fell apart.
The talks between 21st Century Fox and Apollo heated up over the last few months. For 21st Century Fox, the potential partnership will boost Shine's global prowess as both a seller and a buyer of programming.
Founded by Murdoch's daughter Elisabeth in 2001, Shine owns 26 production companies that serve 11 countries. In 2011, Elisabeth Murdoch sold Shine to her father's News Corp. for $675 million.
It is now a unit of 21st Century Fox, which was spun off from News Corp. in 2013. Elisabeth Murdoch is still the chairman of Shine.
Shine's shows in the U.S. include the unscripted hits "The Biggest Loser" on NBC and "MasterChef" on Fox. It also makes the drama "The Bridge" for the cable network FX and is producing the highly anticipated Fox drama "Gracepoint" that will premiere this fall.
Still undetermined are which executives will have prominent roles in the new entity should the deal go through and whether positions will be eliminated, although it is likely that some back-office operations could be combined.
Key Shine executives besides Murdoch include Chief Executive Alex Mahon and Chief Operating Officer Tim Robinson. Its U.S, operations are headed by Rich Ross, a former president of the Disney Channel and Walt Disney Studios.
Core's leadership includes President Marc Graboff, a former top executive at NBCUniversal, and Jennifer O'Connell, who heads its U.S. TV operations.
Endemol's top executives are Chief Executive Just Spee and President Tim Hincks.