Pan-European broadcaster RTL Group revealed it had dropped plans to take 100% control of British commercial TV station Channel 5 as it posted a hefty year-on-year fall in profits.
Hit by the ad recession, RTL’s underlying profits sank 23% in the first half to €181 million ($176m; £113m), though revenues rose 5.1% to €2.1 billion. Net profits jumped from a €2.4bn loss last year (the result of goodwill writedowns) to €17m.
Despite signs of stabilisation in the British and French ad markets, the broadcast group was hit hard in Germany, where advertising revenues declined 7.2%. RTL last week forecast no immediate let-up in the ad gloom [WAMN: 05-Sep-02].
One of RTL’s biggest success stories is C5, in which it has a 65% stake. The channel’s audience share jumped from 5.6% in H1 2001 to 6.4%, while its advertiser share rose from 6.1% to 7.3%. Losses tumbled 83% to just £1.89m
However, the group has decided not to proceed with the purchase of the 35% of C5 held by United Business Media.
Instead, some of the £200m-plus earmarked for the acquisition will be ploughed into the channel’s programming budget, which will get an additional £9m boost in 2003 to £158m, having been raised by £8m little over a week ago [WAMN: 02-Sep-02].
UBM wants to pull out of commercial TV, but is expected to hold on to the stake in the medium term. RTL retains the right to veto a sale to a third party and buy the shares itself.
Meanwhile, the channel – soon to be rebranded Five – is still waiting to hear whether ceo Dawn Airey will take up the offer of the chief executive’s job at leading commercial broadcaster ITV. One of her conditions for staying at C5 was said to be a rise in the programming budget.
Airey is expected to make her choice when she returns from holiday.
Data sourced from: multiple sources; additional content by WARC staff