Special Report: Link’s 10th Anniversary: For 10 years, Link has successfully combined licensing and distribution

In 1986, one the U.K.'s largest newspaper owners, United Newspapers, decided to pull out of television and concentrate on its core business....
September 1, 1996

In 1986, one the U.K.’s largest newspaper owners, United Newspapers, decided to pull out of television and concentrate on its core business.

At that time, Claire Derry ran the communications division of a United subsidiary called Link House Publications. Since this was now on United’s list of interests to drop, Derry was asked if she would like to lead a management buyout.

Derry said ‘yes’ before looking over her shoulder and thinking ‘what management?’ Nevertheless, the buyout went ahead with support from a venture capitalist, and when managing director Derry opened the doors to Link Licensing, she had just two staff.

It’s now 10 years later, and the landscape has changed dramatically. Derry, along with business partner David Hamilton, has built a broad-based international outfit that handles licensing for major brands such as Barbie, Asterix, The Wind in the Willows and Goosebumps.

Last year, Link received a further boost when investment bank Guinness Mahon Development Capital agreed to back the company’s television distribution ambitions by granting access to its global rights fund.

Shortly after Derry’s buyout in 1986, Hamilton took up the role of chairman. The pair had previously worked together in the U.K.’s fast-growing independent production sector.

While Derry’s background lay in retail marketing, Hamilton was an accountant who had entered television as an adviser to the entrepreneurial Lord Hanson. Between them, they decided to focus on children’s programming, where they felt their skills would be complementary.

‘I didn’t want to produce programs. I was more interested in their global exploitation,’ says Hamilton. ‘At that time, the television distribution and character licensing businesses weren’t working together, but we felt that in children’s programming, they needed to.’

From the start, the Link philosophy was to create a complementary slate of licensing and television activity. Though they freely admit that hasn’t always been possible.

After a couple

of tough years in which television distribution dominated the company’s activities, Link’s portfolio of clients shifted heavily towards licensing.

The first significant breakthrough came in 1987 when Link was appointed by Thames Television to handle the licensing of a property called Count Duckula, which proved to be an important step in boosting Link’s profile.

Subsequently, the company grew by acquiring other small companies in the licensing arena. The most significant deal came in 1990 when Link took over the company that was responsible for the licensing of Mattel’s Barbie in the U.K.

Although Barbie represented something of a financial gamble for Link at the time, the results have been remarkable. A concerted program of brand extension through retail has helped to increase licensing income on Barbie products more than tenfold since Link took over. It is now the number one girl’s property in the U.K.

However, the success of Barbie was a further reminder that Link’s television distribution business was lagging behind. ‘As we developed, we always went after properties we thought we could do good business on,’ says Derry. ‘That tended to take us away from our television business, which levelled off.’

The creation of Link Entertainment in 1991 to take care of the television side of the business, and the appointment of Jo Kavanagh as its head of sales did a lot to restore Link’s presence in the television market.

‘Jo did a huge amount to build new relationships,’ says Derry, ‘and she also did a good job of selling what we’d already acquired.’

For Derry and Hamilton, the existence of two divisions-Link Licensing and Link Entertainment-was a vital step. ‘We wanted to provide producers with a complete solution,’ says Hamilton. ‘Our whole strategy relied on working the two together.’

But despite progress in television distribution, Link still lacked financial clout. ‘I always took a conservative view that we should grow within our own resources and not take huge risks that would bust the company,’ says Hamilton.

While that proved a wise decision during the early years, it became a frustrating limitation on production investment.

‘We’d done projects such as What-a-Mess where we put writers and producers together and raised finances,’ says Hamilton, ‘but we just ended up with a small part of something we made happen. It was our expertise and we wanted to get a bit more out of it.’

To make major inroads into distribution it is necessary to raise money for guarantees, and Link ‘didn’t have those resources,’ admits Hamilton.

In 1995, an opportunity to overcome that obstacle presented itself in the shape of Guinness Mahon’s global rights fund. ‘We needed a source of investment and were keen to be with them,’ says Hamilton. ‘They know the children’s market and as part of the Bank of Yokohama offer good contacts in Japan.’

The fund, which gives Link access to development capital, has allowed the company to realize its ambition of playing a more significant role in the early stages of projects.

As a direct result of the financial security it now has, Link has been able to build a US$10-million slate of productions. This includes a follow-up series for the award-winning half-hour special The Forgotten Toys, produced by Hibbert Ralph Entertainment.

A combination of regular royalties from licensing and Guinness Mahon’s capital investment has also enabled Link to focus on international expansion.

The first significant move came when Kavanagh was dispatched to set up an office in the U.S.

A lot of Derry’s time is now spent on strategic overseas development, and she says that Link is close to launching a joint venture in Germany. Japan is also being targeted as a serious opportunity for expansion.

She insists, however, that Link will not take its eye off the licensing business, which continues to grow. In a major new licensing deal, Link is to handle Scholastic’s Goosebumps when it comes to the U.K. next year.

Both Derry and Hamilton attribute Link’s success to its respect for the brands it works with. They cite the launch of an in-house design division called Primary Design as an example of the support systems they have built to ensure the integrity of a client’s property. ‘We are very caring with properties, and this has helped us retain clients such as Mattel and Thames,’ says Derry. ‘You don’t build relationships like that overnight.’

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