Summary:

The TV-VOD rollercoaster that is SeeSaw is still waiting for an overdue promised investment to arrive. But it will likely need to cut costs…

SeeSaw logo
photo: Rudd Studio

The TV-VOD rollercoaster that is SeeSaw is still waiting for an overdue promised investment to arrive. But it will likely need to cut costs even if the money materialises.

Private equity firm CCP bought 75 percent of the site from Arqiva in July together with a group of investors. A further cash injection promised by one, Weston Capital Management, had been due to arrive by September 1.

The delay was supposedly down merely to Transatlantic “red tape” and the money was indeed thought to be on its way. But, one week on, and the cash apparently still has not materialised.

It looks bad that investors who promised to recapitalise SeeSaw still haven’t completed everything two months after the acquisition was agreed.

The deal to buy SeeSaw had happened relatively quickly. On the same day CCP bought SeeSaw, with backers including Hollywood veteran and liberal U.S. Congress candidate Dan Adler, CCP’s boss Adam Levin and Adler also bought the Beitar Jerusalem football club. But that deal has been aborted after a dispute with the club’s conservative owner, leaving the Jerusalem Post to report they have “disappeared like thieves in the night” without having paid a promised $400,000.

In fact, unlike with the Jerusalem deal, ownership of SeeSaw has definitely already transferred to CCP; the deal won’t collapse and CCP isn’t disappearing. But Channel 4 shows went off the site last week because its C4 license expired and because, in lieu of the re-investment, it has not been renewed.

Some around SeeSaw and Arqiva are getting twitchy. The outfit, run by seasoned TV execs including platform controller John Keeling, is obviously keen that such key content deals as Channel 4, Channel 5 and BBC Worldwide are renewed – without them, SeeSaw is nothing.

Former BBC One controller Michael Jackson, who was due to become SeeSaw chairman, is understood to be concerned and considering his positionbut he is likely at least to remain on the board because he became an investor in the recent buy-out. Update: Jackson never invested in SeeSaw and his chairmanship was conditional on Weston’s investment arriving.

Even if the money does arrive, however, those SeeSaw execs may need to run a different ship than they are used to. CCP plans to finance further content acquisition, perhaps in concert with its Hollywood connections. But SeeSaw was unprofitable. CCP, which is a turnaround specialist, will likely need to restructure costs first.

That may include renegotiating content licenses – an opportunity presented by the expiry of its C4 license. One option could be to acquire partial, rather than full show catalogue. That would reduce content outgoings, but would also cut back content to only the most popular shows.

If the promised money does not arrive, however, it would seem to jeopardise both existing and new content.

CCP is also likely to want SeeSaw to operate more like a startup. After acquiring Bebo from AOL (NYSE: AOL), for example, it moved back toward product innovation by hiring Xbox co-founder Kevin Bachus to lead a rejuvenation of the product and bringing back Bebo founder Michael Birch as a strategic adviser and investor.

Even if SeeSaw makes it through all this, it’s unclear what part SeeSaw can play in the ecosystem. Although the idea of a Hulu-style UK aggregator once seemed attractive in the guise of Project Kangaroo, UK broadcasters (who own SeeSaw’s content but not any equity in it) are currently happy distributing through their own-brand VOD services – like 4oD, ITV (LSE: ITV) Player and Demand Five – through which they can keep 100 percent of their ad revenue and which reduce their reliance on third parties’ sustainability.

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