ModernTimes sees $39 mil loss for ’97

Pay TV problems, programming costs led to deficit

AMSTERDAM — Former Kinnevik media arm Modern Times Group posted a 1997 net loss of 293 million Swedish kroner ($39 million), vs. a $30 million loss in 1996.

Much of the 1997 loss was in the broadcast sector. Main network TV3 boosted sales 11% over 1996 figures in Scandinavia. But profit, admitted Pelle Tornberg, MTG president and CEO, remained elusive, chipped away at by increased programming costs due to currency fluctuations and problems related to the company’s niche channels Z TV, 3+ and TV6.

Problems in the pay TV operations with TV1000 also continued, as did “informal talks” with French pay TV operator Canal Plus concerning how to solve a situation “in which there is really only enough room for one player” in Scandinavia,Tornberg told Daily Variety.

Battling broadcasters

TV1000 currently has about 234,000 subscribers, compared with more than 300,000 at Canal Plus. The two operators have been waging a fierce war over the past six years for pay TV dominance in the Nordic territories.

MTG became independent of Kinnevik and launched on the stock market last year. While net sales also showed a decline — from $399 million in 1996 to $393 million in 1997 — deconsolidated net sales (excluding Home Shopping Service, which now operates as an associated company) reflected an increase of 8%.

That rise in real sales from $363 million in 1996 is being seen as a sign that MTG, after being battered by currency and other problems for several years, is on the mend. A cost-reduction program and a strong advertising market give every sign the company can expect to turn a profit “sooner rather than later,” chief financial officer Johan Lindgren said.

MTG has a chain of nearly a dozen free-to-air and pay TV stations across Scandinavia and the Baltic States, a raft of production companies, Viasat pay TV subscriber and delivery services, as well as radio, print and publishing interests.

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