SBS slashes program budget, hitting H'w'd
AMSTERDAM — European channel launcher SBS Broadcasting’s massive cost-cutting operation will affect the Hollywood community, CEO Michael Finkelstein has told Daily Variety.
Finkelstein’s comments came on the back of the group’s release of what in testing times is a relatively optimistic forecast for the rest of the year. Forecast was issued in the wake of the Sept. 11 attacks on the U.S., which left an already limping European advertising market further weakened. SBS’ third quarter report is due out in mid-November.
Finkelstein said that that the company’s cost-cutting efforts would carry through to SBS’ dealings with Hollywood. Company had plans earlier to invest as much as $400 million in program acquisitions, but the worsening economy has put a crimp in its spending patterns.
Finkelstein says the network, which now has 12 stations across Europe, “will not be buying fewer programs, but we will be paying less for what we do buy. We expect to get the new programming, but we also expect to get better terms.”
Cash flow surge
Company predicts revenue growth in the single digits for continuing business in the third quarter and for the year — figures one analyst said were a bit lower than expected. But it is also expecting positive numbers for station operating cash flow for continuing business in the third and fourth quarters, as well as a 50% surge in station operating cash flow for continuing business this year. All projections are on a local currency basis.
The cash flow surge is being put down to, among other things, the company’s massive cost-cutting, which analysts say was much tougher than expected. Finkelstein told Daily Variety that he stepped up to the plate earlier this year as new CEO “on a platform of cost-cutting across the board, and that’s what I’ve done.”
SBS earlier said that as many as 1,500 of its employees could be laid off over the next year, but Finkelstein now adds that “it will probably be fewer. There is no hard and fast rule right now.”
He confirmed that the company had stopped putting money into TV3, the group’s outlet in Switzerland. Reportedly, there have been differences of opinion with regard to programming strategy between SBS and its partner in Switzerland, TA-Media.