Who says you can’t go home again?
Television producer Ben Silverman’s Propagate studio has acquired Electus, the small West Hollywood production firm behind such shows as the CW’s “Jane the Virgin” and NBC’s “Running Wild With Bear Grylls” from Barry Diller’s IAC.
Silverman launched Electus in 2009 with IAC’s backing. But in 2016, he sold his stake and exited the production company to rejoin his former business partner, Howard T. Owens, to build their Los Angeles-based content studio Propagate.
“To be able to come back and buy back my old company is just fantastic,” Silverman said in an interview.
Silverman and Owens also on Tuesday announced Propagate’s separate purchase of a majority stake in Artists First, a 17-year-old management company co-founded by Peter Principato, which has offices in Beverly Hills and New York.
Financial terms of the two deals were not disclosed.
IAC, the New York media company that owns dating services Tinder, OkCupid and Match, decided to shed the entertainment studio because it was not a core part of its business, according to two people familiar with the situation who were not authorized to comment.
“They are opportunistic and disciplined financially,” Anthony DiClemente, media analyst with Evercore ISI, said of IAC. “They don’t fall in love with any of their assets.”
Electus has generated more than $100 million a year in revenue and about $10 million in profit annually, according to people who are familiar with the financials. The company has about 25 full-time employees.
IAC held on to Electus’ digital properties — including CollegeHumor, Dorkly and Dropout — and rebranded the group as CH Media. But the company appeared to be less enthused with the television part of Electus that it sold to Propagate.
After a strong run in previous years, Electus posted an operating loss in the first two quarters of 2018. IAC did not disclose the size of the loss but cited higher compensation costs as it staffed up the recently launched CollegeHumor subscription service. IAC already had been losing plenty of money in its video division, which includes the Vimeo video service, and Electus no longer constituted a bright spot.
For Silverman and Owens, buying the two companies should better position Propagate as a leading independent studio, with a small library, at a time when TV networks and streaming services are clamoring for new programming, including remakes. With the addition of Electus and Artists First, Propagate now will have about 85 employees.
The acquisitions “will allow us to unlock and tap into some great brands and talent from Electus and Artists First,” Silverman said. “It gives us more partnerships and should help us expand internationally.”
Artists First has producer credits on “Black-ish;" a hit show on ABC; its spinoff “Grown-ish” on cable channel Freeform; “The Last O.G.” on TBS; and “The Gong Show,” which is produced for ABC. It also boasts a client roster of noted comedians, including Jordan Peele, Tiffany Haddish, Kate McKinnon, Kenya Barris, Anthony Anderson, Will Arnett and Tracee Ellis Ross, plus “Crazy Rich Asians” director Jon M. Chu.
Silverman, a former talent agent who served as NBC Entertainment chairman from 2007 to 2009, has achieved most of his success as a television producer who has been ahead of the curve.
He saw the potential for a wave of British remakes before American network executives. As an agent for the William Morris Agency, he sold such shows as “Who Wants to Be a Millionaire” and “Big Brother” to U.S. networks. He launched his own studio, Reveille, then secured the U.S. rights to “The Office.”
The American version launched in 2005, and became a signature hit for NBC. He nabbed the rights to a Colombian telenovela, “Yo Soy Betty la Fea,” which was adapted into “Ugly Betty” for ABC. He also was an early proponent of reality show formats with such hits as “The Biggest Loser.”
After becoming an NBC executive, Silverman sold Reveille to Elisabeth Murdoch for $125 million. She eventually sold her production company, which included Reveille’s assets, to the media conglomerate controlled by her father, Rupert Murdoch.
While at Propagate, Silverman sold a reality show concept to Apple Music, which then became one of the tech giant’s first TV series. “Planet of the Apps,” a show built around app builders, lasted just one season.
Last month, longtime talent agent Greg Lipstone joined Propagate as its president, signaling the studio’s ambitions to grow. Lipstone worked with Silverman and Owens nearly 20 years ago when they were all agents at William Morris, and he negotiated the Artists First and Electus deals.
“We are serial entrepreneurs,” Silverman said. “And being independent is key.”
A+E Networks also owns a stake in Propagate.
The acquisitions were made with financing that Propagate lined up earlier this year from the Raine Group.
“It’s nice to see that Ben Silverman, who created Electus for IAC in 2009, has now purchased the company from us,” IAC’s Diller said in a statement. “We wish him the best for its future.”
1:55 p.m.: This article was updated with analyst commentary and information about IAC’s financials.
This article was first published at 8 a.m.