The financial plight of EM.TV & Merchandising has deteriorated from awful to atrocious, far exceeding its own worst forecast.
The German media group has called a news conference today in Munich at which it will unveil a pre-tax loss for 2000 in the region of one billion Deutschmarks (E511 million). For much of last year, the broadcaster predicted a pre-tax profit of DM600m, revising this downward in December to DM500m.
Those close to the situation say that the debacle’s cause stems from extraordinary charges related to two events last year: the acquisition of Muppets creator, US-based Jim Henson Company; and a 50% stake in world motor-racing organiser Formula One.
Attendees at the press conference will be watching closely for signs of the alleged tensions between EM.TV chief executive Thomas Haffa and chief financial officer Rolf Rickmeyer, recruited last fall to stabilize the company's erratic accounting. According to insiders, the two men have argued heatedly over write-offs in the 2000 figures – especially during the last fortnight.
News source: Wall Street Journal