FD interview - Big Brother's big brother

Richard Johnston, former FD and now joint MD of the company behind Big Brother, talks to Jenny Hirschkorn about starting a broadcasting phenomenon.

How many accountants would admit to having succumbed to parental bribery when embarking on their careers? Come on now, own up. Richard Johnston confesses that he struck a deal with his mother when he graduated from university with a degree in politics. Afraid he would drop out and become a hippie somewhere in Thailand, she offered to fund the airline tickets for his round-the-world travels on the strict condition that he would have a job waiting for him when he got back. And it was the accountancy firms that were most amenable to the idea of a delayed start.

So that's how Johnston, now joint managing director of TV production company Endemol, stumbled into the profession. A man of his word, he returned reluctantly from his travels and got stuck into his training at Ernst & Young, but soon decided that he needed a little more spice in his life than auditing insurance companies. Gradually, by lobbying the right people, he managed to get his workload shifted towards the entertainment industry and, by the time he qualified, the seed had been sown that this was the sector he wanted to work in.

Feeding his addiction for travel, he took a second year out and, in between being drugged and mugged in Colombia and falling over a cliff on a horse in Cuba, he began to formulate a plan for his future. 'I had plenty of time on some very long bus journeys to do a lot pondering about what I wanted to do next. Although I'd had a great time at Ernst & Young, I was thinking that audit was not really the way ahead for me.'

He had narrowed down the industries he was interested in to sport and television and within six months of returning to the UK and Ernst & Young, he landed a job as financial controller at a small TV production company, then known as Broadcast Communications. 'I wasn't particularly bothered about what the specific job was. I just wanted to get my foot in the door. I reasoned that I could always move on later.'

Yet here he is, almost 10 years on, having seen that same company evolve into one of the country's major forces in independent programming. So what have been the main factors driving the business's success?

Bankable format

'When I joined, the company was just beginning to take off. It was just when Ready, Steady, Cook had become a fixture on TV. And that's what every company like this needs - especially smaller companies - a recurring, bankable format, there all year, and next year and the year after. That's the holy grail from the financial point of view, because it gives you the stability to start planning ahead, secure cashflow as well as get some international sales.'

Soon after that, Changing Rooms and Ground Force both established themselves.

Broadcast Communications had become a credible player. It was now high-profile enough to attract the attention of Endemol, a Dutch production company that was shopping around in all the big European markets, trying to build up a major international network by acquiring one of the top production companies in each of the main television territories.

In 1998, Endemol snapped up 50% of Broadcast Communications from its then owner, Guardian Media Group and, two years later, it bought the remaining 50%.

This was a sector whose star was in the ascendancy. Up until that point, the television production industry had been a very different business.

A much larger chunk of programming was produced by the networks inhouse in those days - the BBC reserved 75% of its programming budgets for inhouse productions - and independent producers were not retaining much in the way of rights. Today not only is a much more substantial portion of content produced by independent companies but, particularly in the wake of the Communications Act of a couple of years ago, those companies are 'now in a much better position to hold on to more of their rights'.

Johnston is full of praise for the stance taken by the government on this issue. 'I think the government recognised that the creative industries in the UK are in a unique position, through our use of language, to be a key strength and they have introduced some very enlightened regulations targeting those industries. As a result, we've seen some real value created in this sector and a whole host of deals in the last 18 months.'

In fact, Endemol itself was bought by Spanish telecoms and media giant Telefonica five years ago, and some pundits see last November's sell-off of around 25% of the shares on the Dutch Euronext Exchange as an indication that a full sale is on the horizon. Johnston certainly does not rule out the possibility. 'I think all things are possible and we'll have to see what happens,' he says.

Since its acquisition by Endemol, the UK operation has grown exponentially and along the way it has played a major role in the creation of a whole new genre, reality TV. Endemol's most famous - or infamous, depending on your point of view - product is Big Brother, which was slow to take off in its pilot territory, Holland, and was almost pulled before it suddenly captured the public's imagination and spread across some 15 other countries.

'No-one ever really thought that Big Brother would work,' admits Johnston.

'It was only because the guy behind it, John de Mol (Endemol's founder) was already such a major television player with such an incredible track record that it even got off the ground.'

Reality TV

Love it or hate it, there is no denying that reality TV has had a major impact on television schedules over the past five or six years. The current successful Celebrity Big Brother has just finished its run on Channel 4. So how does Johnston feel about having been part of this broadcasting phenomenon?

'We feel great. I think the way to view reality is not to be too serious about it. Television's a broad church. It's got room for all types of programming. It should have hard-hitting documentaries, it should have wonderful dramas, it should have great comedy and it should have pure entertainment - it always has done. I think what shows like Big Brother and others have done is to carry on that entertainment tradition.

They should be regarded not as a cerebral piece of fine art but just enjoyed for their fun.' That's got that straight, then.

If you don't enjoy it, he says, watch something else. But doesn't he feel any responsibility in the wake of relentless claims about the dumbing down of standards?

'Not at all. I think if you picked up a TV schedule from the 70s, you'd be surprised. Although there were some great shows, like I, Claudius and Civilisation, there was also a lot of utter rubbish, and I think there's a bit of rose-tinted spectacles in those arguments. The great shows are the ones people remember and they forget about the Blankety Blanks and 321s.

'We're very proud of Big Brother. I think to have reinvented that show year after year - here we are six years later and the brand name is as strong as ever - is quite an achievement.'

As the company grew, so did the role that Johnston himself played within it. Some three years after he joined the business, just as he was thinking about what his next move might be, a new strategic role was created as head of business development. 'I pushed myself firmly forward as the right candidate for that job, and what that meant was that I got to oversee an acquisition and growth strategy in the UK.'

What sort of businesses were they acquiring? 'We were looking at television companies and we bought a production company called Brighter Pictures, which has done very well, but that was also the time of the dotcom boom, so we did a couple of things in respect of that. We bought a digital media company called Victoria Real. It was doing fantastically at the time and then it went through the inevitable repositioning and downsizing, which was painful, but it's come out of it very well and is still very successful.

'At the same time, we set up our own, start-up brand called Zeppotron, which has recently made the show Space Cadets, which has attracted a lot of publicity.'

In 2001, the company's finance director moved on and, with the backing of Tom Barnicoat, then the UK operation's chief executive and now the group chief operating officer, Johnston stepped into the role. It fitted perfectly with his plan to take on a new challenge every two to three years, as did his latest move when, in January last year, he became joint managing director, alongside Lucas Church, former commercial director.

Johnston, whose responsibilities still include the finance function, explains how his role has evolved: 'I think, in each of the roles I've had, while I've been in that job title, I've managed to expand that role to be a lot more than the job title suggests. And with the FD role that was certainly true, particularly after the first year, when my remit expanded to cover more of a COO role. I started taking on all different parts of the business - the IT side, production management, HR and facilities - things like that.'

As Barnicoat was becoming increasingly involved in issues at group level, Johnston stepped up to take on more and more of his responsibilities.

Then, when Barnicoat finally moved to Holland to become group COO, he left an obvious gap to be filled.

The two natural internal candidates were Church and Johnston and, avoiding the sort of conflict that their own productions thrive on, the two men together approached Barnicoat to suggest that they be jointly promoted.

'He looked very relieved that he didn't have to choose between us,' recalls Johnston. Now it is all very cosy. 'We get on extremely well, sit opposite each other and we've got a very good working relationship in terms of trust and lots of humour.'

Not bad, really, for someone who narrowly escaped life as a hippie.

CV

Who: Richard Johnston

When: 6 May 1967

Where: Hemel Hempstead, Herts

Qualifications: BA (Politics), University of Exeter; ACA.

Work: Financial controller, Broadcast Communications; head of business development, then finance director and ultimately joint managing director, Endemol, UK.

Life: Adventure travel; running (he has completed several marathons); quizzes (he has competed on MasterMind, where his specialist subject was the history of the rugby World Cup).

ENDEMOL FACTS

•    With a turnover well in excess of £100m, Endemol UK represents approximately 25% of the group's revenues.

•    The company has some 200 permanent staff, and, with freelancers, this can swell to as many as 1,000 at any given time.

•    The sale of 27.9m shares to institutional investors at EUR9 valued the company at about EUR1bn (£684m), one fifth of what Telefonica paid five years ago.

•    The Endemol group has a network of production companies spanning 22 countries.

•    As well as Big Brother and Space Cadets, credits include Eight Out of 10 Cats, The Match, Cosmetic Surgery Live and Restoration.

•    Last July the company announced the launch of a new TV production arm, to be run by Paul Marquess, former producer of The Bill and creator of Footballers' Wives.

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