Fox Kids Europe posts profit

Strong perfs across the board boost numbers

AMSTERDAM — European kidnet Fox Kids Europe (FKE) boosted its pretax profit to $5.6 million, up from a loss of $32.7 million in the previous period, and reported a 14% rise in revenues to $152 million in a fiscal year that ended Sept. 30.

The higher numbers were a result of strong performances by the channels and online operations, helped along by a $26 million writeoff related to FKE’s programming library. Channel and online operations increased by 31% to $109.4 million. Subscription revenues rose 28% to $75.2 million on the back of a 2.5 million household increase in subs to 34.8 million.

Ad revenues jumped 36% to $30.3 million despite the fairly flat ad market across Europe. Bruce Steinberg, chairman and CEO of Fox Kids, told Daily Variety, “We are good at what we do. We continued to add new homes, improved the programming and that in turn increased the ratings,” all factors that helped draw additional adverts, he noted.

Programming distribution revs, however, slid by 22% to $31.4 million, with Fox Kids predicting they could drop some 30% more next year.

The drop in distrib revs is the casualty of lower volumes of new programming available when demand in the U.S. dipped after the takeover of FKE by the Walt Disney Co. in October of 2001. “Since programming wasn’t being produced for the Fox Network, we went from 300 to 100 episodes,” said Martin Weigold, chief financial officer of FKE. He added, however, “We’ve been out there filling the gap.”

Among the gap-filling titles acquired this year were “Tutenstein,” “Sonix X” and “Shaman King,” set to be delivered during the fiscal year ending September 2004. FKE also concluded some key output agreements, including a pact with Super RTL, “one of the examples,” said Steinberg, “of the various synergies we are developing with Disney,” parent group and half owner of Super RTL. It also extended its agreement with terrestrial net Antena 3 in Spain through 2006.

Steinberg noted Fox Kid’s major programming investments aimed at turning the distribution rev tides wouldn’t kick in until after September 2004 and 2005. A reduction in level of sales outside of Europe and the Middle East and a continuation of what FKE’s report called “challenging market conditions” also contributed to the distribution problem.

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