Bertelsmann, the privately owned German media giant which until last weekend’s upheaval [WAMN: 29-Jul-02] seemed as majestically inviolate from present day market mayhem as Mad King Ludwig, on Wednesday denied that rumoured liquidity problems could precipitate the sale of its controlling stake in Britain's Channel 5.
Channel 5 posted a loss of £49 million ($76.59m; €78.08m) last year but is projected to move into the black in 2003, six years after its launch.
Bertelsmann being Bertelsmann, the denial remained off the record and attributable only to ‘sources’. “It’s nonsense. Why would [we] sell something that is performing so well and is likely to start breaking even next year?” said the ‘source’.
Although Bertelsmann has launched a strategic review of its assets, the 'source' insisted, this did not mean a ‘for sale’ sign had been hung over Channel 5.
The 65% stake in Channel 5 is held via Bertelsmann-controlled RTL Group, Europe’s largest commercial broadcaster – which itself has not been in the pink of late, having been precipitated into the red by charges of €2.56 billion related to goodwill impairment. This resulted in a net loss for 2001 of €2.5bn.
But observers see this a temporary blip on the chart, pointing out that RTL is Bertelsmann’s cash-flow cow, providing some 40% of its EBITDA (earnings before interest, tax depreciation and amortization).
Other observers, however, point out that a fistful of Murdoch moolah would not go unappreciated by Bertelsmann right now, Tony Blair permitting, of course.
Data sourced from: MediaGuardian.co.uk; additional content by WARC staff