Translating into Europe

Last week, we spoke about entrepreneurship with Harry Evans Sloan, founder and exec chairman of SBS Broadcasting, a European conglomerate that owns 16 television and 53 radio stations. The conversation concludes today with a discussion about achieving entrepreneurial success abroad.

Q: In what ways did your experience as a Hollywood producer prepare you for building SBS?

A: Knowing how television programming and movies are financed and produced, and knowing who the participants are, how the pieces come together. Then going over to Europe, setting the clock back 10 to 20 years in terms of its development, having participated and lived through those years in the U.S. Now, as that process unfolds in Europe, I understand it very, very well.

Q: You once told me a statistic that prompted your idea to further commercialize those European channels. Would you tell our readers?

A: In the U.S. market, somewhere between 30% and 40% of all ad dollars goes to television. In Scandinavia, when I got there, it was, I think, less than 2% because they had just started allowing commercial television. We were invested in the very first commercial television station in Norway, the first one in Copenhagen, Denmark. We were among the first groups in Holland and in Belgium, and we were the first group in Central Europe, in Hungary, where we won the first commercial license.

Q: So that statistic served as a motivation for you to want to get in there?

A: Absolutely. Because television works everywhere it goes.

Q: It’s almost axiomatic?

A: Yes, television will eventually take 20%, 25%, 30%, in some countries 50% of the ad dollars. Getting a television market that’s in its infancy, it’s just a matter of getting advertisers and agencies who aren’t used to using television, who spend all their money on print, and weaning them away. … SBS as a company, during the years 1993 to 2000, had very significant operating losses every year, because we would be starting up new television stations. It wasn’t until year three or four, on the average, that they would start breaking even and making money thereafter. It wasn’t until we stopped launching new stations in 2000, and focused on making the existing stations more profitable, that SBS was perceived as a net profit-positive company.

Q: You didn’t just parachute into Europe for a few days at a time. You embedded yourself there. Why?

A: As SBS became a bigger company, it was impossible for me to run it from L.A. So I did move to Europe. I based myself in the U.K. because I only spoke English, even though we were in nine or 10 countries at the time. If you’re in business all over the world, like Rupert Murdoch, for example, it doesn’t matter. You go everywhere. But living in L.A., running a business in Europe is really impossible. I lived there for six years. When I left to come back here, I promoted our COO (Markus Tellenbach) and replaced myself as CEO and became executive chairman.

Q: What’s an example of a business cultural difference you encountered?

A: In America, the network news has a tradition of being completely impartial. … European media, including television, have often had a political bias. … So when we’ve gone into a country, like Hungary for example, we went in with the calling card that we are going to be impartial. We’d have meetings with political parties where they’d say, “Well, are you with us?” “No! No, we’re not, but we’re not with the other guy either.” I think that may have had something to do with winning the license.

Q: Would you provide us with a case study of how U.S. business could learn from Europe?

A: For years we understood why the major studios wanted to do all their deals in dollars. But when the euro was created five years ago, we and a lot of European broadcasters wanted to pay in euros, the idea being that it would be more stable and even things out for everybody. All the U.S. companies said, “Absolutely not.” There was a complete rigid unwillingness to be sensitive to a European concern, and it ended up costing the studios a lot of money.

Unger is a leading exec recruiter. At various times, he led the media and entertainment practices of the world’s three largest executive search firms. He can be reached at sa.unger@verizon.net.

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