Chairman touts new style, local programming
CANNES — Europe’s second largest station group SBS touted a more conservative, cost-conscious management style and emphasized local programming as the key to greater market share at Mipcom on Wednesday.
The company, which operates 11 TV stations from Amsterdam to Bucharest, used the annual TV trade show to rehearse what it will say to stock analysts in New York and Amsterdam in a few weeks’ time. SBS is quoted on both the Nasdaq and the Amsterdam stock exchanges, trading at around $12 a share, where it had once been at $50.
SBS exec chairman Harry Sloan said the group had performed particularly well over the last quarter, with cost-savings of 8%, and that it was on course for “its best year ever” — record revenues of $500 million, record EBITDA and record cash flow.
While the company had been left standing at the altar twice in the last five years, first by rival station group Nova and then by Euro cabler UPC — both of which hit financial speedbumps at the crucial moment — SBS is now focusing on its own “balance-sheet improvement.”
CEO Markus Tellenbach said the company had cleared out under-performing management in several territories and slotted “creative people” into top jobs at each station. Staffs, on average, have been pared by 20% and corporate overheads by 15%. Co-productions and digitalization have also helped trim budgets.
Like so many other buyers, SBS toppers say they walk away from high-price entertainment and sports deals.
Sloan and Tellenbach said that the company collaborated on program production this year, which has seen stations in different markets share costs on format creation. “Temptation Island,” for example, is produced for a 33% savings across three Scandinavian territories. Sharing expertise has also meant that there are fewer failures on original shows that the company produces.
Despite the belt-tightening, Tellenbach insisted that programming quality hadn’t declined, and pointed to rising curves of audience shares in most markets as proof that the strategy was working.
Sloan, an American based in London, said SBS’ reliance on Hollywood product had lessened considerably. Annual spend on U.S movies and TV series stands at $100 million a year, down by 50% over the last several years.
“From Hungary to Belgium the audience preference is for local shows,” Tellenbach said. “Many U.S. series lose their teeth in translation to Europe.”
“What we essentially want from Hollywood suppliers,” Tellenbach added, is “hit movies with no baggage attached.”
That view is being echoed across Europe these days as local stations rev up their own production machines or import cheap formats. It is indeed one of the central themes of this 18th edition of Mipcom.
At past Mipcoms, SBS toppers had talked of expansion into other markets, but Sloan now says that the focus is on the territories where the company already has a base. An attempt to introduce a commercial station into Switzerland a few years ago ended in a $30 million fizzle.
Not everything is rosy at SBS: For the stock to rise and the stations to thrive, the economy has to pick up in the States and in the European territories where it operates.
Further down the road, greater consolidation in Euro media is bound to overtake the company. A merger with chief rival RTL might make sense, but there would probably have to be station disposals in markets where the two are in competition.