Bertelsmann Takes a Hit from UK TV Phone-In Scandals

30 August 2007

LUXEMBOURG: Europe's largest broadcaster, Bertelsmann-controlled RTL Group, announced a significant write-down affecting its UK television channel Five.

The €123 million ($167.6m; £83.53m) reduction was triggered by a combination of collapsed viewer phone-in revenues and higher programming costs.

The channel was one of several broadcasters fined by UK regulators for running faked phone-in competitions on quiz and entertainment shows.

Costs were also hiked by the launch earlier this year of two new digital channels, a move that has upped the broadcaster's aggregated year-on-year market share from 6% to 6.3%.

These factors deflated RTL's first-half EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) by two-thirds, down year-on-year to €5m from €15m.

However, UK revenues rose 8.3% to €242m over the same period.

Data sourced from Financial Times; additional content by WARC staff