Insolvency documents show that the directors of KEO Films, including co-founder River Cottage chef Hugh Fearnley-Whittingstall, paid themselves £4m over the last seven years, even though the company consistently failed to record a profit and ran up millions of pounds in debts during that period, The Guardian reported back in August.
The Freelance Informer reached out to the KEO Film’s administrators and the new owners, Passion Pictures, to find out if KEO’s TV freelancers had finally been paid and what role freelancers would take in future productions.
When it came to rescuing the business that brought TV viewers shows such as Celebrity Best Home Cook and Barrymore: The Body in the Pool, the company run by co-founder Hugh Fearnley-Whittingstall, Chief Creative Officer Andrew Palmer and Creative Director Will Anderson, collectively declared they were unable to put enough money into the business to maintain it as a going concern.
The TV production company had run up debts of £5 million. Despite this, it was shown that directors paid themselves some £4 million between 2014 and 2020, even though it failed to make a profit in any of these years, reported news site Company Debt.
The report also stated that the business reported that turnover had risen from £7 million to £10.6 million in the 2021 financial year and there was a profit of £249,000. This was, in part, because of the furlough scheme, as this reduced employee costs by £186,000.
The £1.7m sale to Passion Pictures, and the consequent restructuring of the business, ensures that despite the significant challenges caused by COVID-19, all KEO staff jobs are secured and current productions will continue as normal, said KEO Films’ administrators, FRP.
KEO Films will retain its bases in London and Bristol, allowing them to continue making content for a range of UK and international broadcasters. Fearnley-Whittingstall has stepped down as a director but said he will still make programmes with the new owner.
This week The Mirror reported this week that Mary Berry’s television show Best Home Cook is set to be axed due to KEO’s financial difficulties.
Do freelancers have a future with Passion Pictures?
Passion Pictures said in the Guardian report back in August that it was doing its best to voluntarily repay as much as possible of the amount KEO Films owed to freelance television workers and small businesses when it went bust.
“We are trying to do the right thing in a difficult situation,” said KEO Films’ creative director, Will Anderson. “We don’t want to get a bad reputation, we are trying to come to arrangements with people where we can.”
He said in the Guardian report that while not all of the old company’s debts could be repaid, offers had been made to repay the majority of freelance employees in full. He accepted KEO historically had a poor reputation for settling invoices late but the company hoped to come to agreements with other small businesses to help it recoup some of their losses.
A Passion Pictures spokesperson told The Freelance Informer this week:
“Passion has been in business for over 30 years and during this time it has been a strong supporter of the freelancer community which is an important part of our operations. Like all businesses we follow whatever rules apply to the hiring of individuals whether freelancers or employees and we pay everyone in accordance with the individual terms that we have agreed with them. In practice, this has meant that Passion has always paid freelancers promptly and generally in less than 30 days, something we firmly intend to continue.”
KEO’s history of late payments to freelancers this summer came at a time when the government was strengthening the Prompt Payment Code to ensure companies pay their suppliers on time. There is now a required payment period to small businesses, which has been slashed in half to 30 days, with commitments to be made personally by CEOs or Finance Directors.