PRAGUE — Michael Garin plans to give Czech taxpayers their money’s worth.
The Central European Media Enterprises topper, who announced completion of a controlling interest in Czech terrestrial TV Nova earlier this month, has big plans for the market leader.
“We want to be the biggest investor in Czech film,” says Garin, adding that U.S.-based CME’s network of regional stations — including Slovakia’s Markiza, Croatia’s TV Nova, Slovenia’s Pop TV, Ukraine’s Studio 1+1 and Romania’s Pro TV — will do much to make that possible.
“The principal synergies in our business are subregional — co-productions and many others,” he says, also including expanded distribution throughout the region.
The combined viewership of CME, now reaching 90 million viewers in six Central and Eastern European countries, makes buying premium series worthwhile, says Garin, conjuring images of Romanian families gathered around “The Sopranos” on cable.
At the same time, one of CME’s lessons throughout its troubled years in the Czech Republic is that viewers want local fare first. This explains TV Nova’s growing role in funding films like Petr Zelenka’s “Wrong Side Up” and the Cannes mart-destined Filip Renc romancer “From Subway With Love” plus the wholly TV Nova-funded “Novel for Women.”
Pavel Strnad, head of the Audiovisual Producers Assn., which is backing a bill to tax terrestrials, distribs and exhibs to fund Czech film, notes the nice gesture but defends the state’s role in fostering art.
TV Nova “will produce film focused on a TV audience,” says Strnad. The proposed 3% tax on tickets, video and DVD sales plus TV ad revenue “supports theatrical films. And that’s the reason why it’s the fund that decides, not TV Nova. That’s the point of the system, and it works everywhere else in Europe.”
The Czech state film fund, once the primary source of coin for local projects, stands at well below e2 million ($2.5 million) and has been largely been replaced by co-productions and the growing role of distribs, who, like Garin, seem unconvinced of the state’s taste in film.
Jana Cernikova of the Czech Film Center, a promotional arm of the industry set up privately in the absence of a state film office, sees Garin’s point.
The root problem is the state’s lack of support for film, she says. “You can’t force the commercial sector to replace what the state should do.”
Another change at TV Nova that other Czech broadcasters are also moving on, digital content, is being held up by licensing authorities seeking heavy fees. TV Nova is suing, arguing its terrestrial license should entitle it to a digital one, but Garin says the issue won’t be relevant for another 15 years.
CME’s TV Nova coup, December’s cash-and-stock deal for a controlling share of the Czech PPF’s interests in the station, comes as sweet revenge.
Ron Lauder’s Bermuda-based CME launched TV Nova in 1994, winning an incredible 70% market share shortly after. But CME was shut out by local partner Vladimir Zelezny in 1999, who held the broadcast license through Czech firm CET 21.
Lauder, citing an international trade treaty, eventually won a ruling that the Czech state owed him $353 million in damages. Czech taxpayers got the bill.
CME’s triumphant return and buyout of TV Nova, financed through $709 million in debt and equity, allowed the media player to score 85% of PPF, TV Nova’s main shareholder.
Now, says, Garin, “we want to be a good corporate citizen.”
CME plans to list on the Prague Stock Exchange, which will add volume and gravitas to the tepid bourse and will allow local funds to invest in CME stock, one of the first U.S.-registered stocks to be offered.
What’s next for the media enterprise that finally made post-communist law and marketplaces pay? “We continue to look at Russia,” Garin says.