Gallic TF1 network posts drop in profit

PARIS — TF1, France’s leading terrestrial broadcaster, has reported that estimated profits for 1996 fell by 8.6% to 550 million francs ($101 million), despite a 2.8% rise in revenues, which last year hit $1.7 billion.

Caught in an economic chill in France that shows little sign of abating, TF1 saw its advertising revenue virtually stand still at $1.3 billion. The web, which once boasted ratings of over 40%, has recently seen its audience slide nearer to 35%.

At the same time, TF1 president Patrick Le Lay has committed the company to substantial investment in the newly launched Television Par Satellite digital platform. According to a TF1 statement, initial costs for TPS, combined with amortization of stakes in television production company GLEM and film production outfit Film Par Film, had a negative impact of around $6.4 million.

$26 million investment

This year, however, TF1 will be investing nearer $26 million in the digital platform, in which it has a 25% stake. Launched on Dec. 17, TPS currently claims to have 34,000 subscribers signed up.

“Patrick Le Lay has made it quite clear that getting TPS off the ground will cost money, and I think the market has taken that message on board,” a TF1 spokesman noted. “As for the drop in profit, a company like TF1 marches along in step with the overall economy and cannot expect to escape when the economy is in trouble.”

First decline

In fact, the profit decline is the first since the network was privatized in 1987 and effectively came under the control of the Bouygues construction group. In recent weeks there has been continued talk that web No. 2 Etienne Mougeotte is working overtime to try to turn the ratings slide around. Despite the slide, TF1 still manages to hold over 50% of the Gallic TV advertising market.

Meanwhile, a Paris appeals court Wednesday rejected TF1’s request to suspend the merger of pay television opera-tor Nethold and Canal Plus.

TF1 brought the suit in October, claiming the merger runs counter to an agreement between Canal Plus and TF1 in which Canal Plus had pledged not to compete with Eurosport.

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