ProSiebenSat 1 cuts spurs fury

Decisions to scale back could trigger sanctions

A decision by ProSiebenSat 1 execs to scale back news programming on its Sat 1 channel could trigger sanctions from German state media regulators, a German state media watchdog warned Tuesday.

Manfred Helmes, head of LMK, the broadcasting authority for the state of Rhineland-Palatinate, blasted ProSiebenSat 1’s move to cut the web’s daily news shows, and he criticized the takeover of the German TV broadcaster by international private equity investors, which he said were largely anonymous and opaque funds.

Earlier this year, private equity firms KKR and Permira bought ProSiebenSat 1 for $4 billion with the intention of merging it with pan-European broadcaster SBS, which they acquired in 2005 for $2.5 billion. ProSiebenSat 1 bought SBS earlier this month for $4.4 billion as part of that plan.

“You know their names, but no one really knows who is behind them,” Helmes told Spiegel Online Tuesday. “A cable provider? Berlusconi?

Murdoch? Gasprom? I really don’t know. That is incompatible with our understanding of the media in Germany. It’s indeed alarming when the investors’ enormous profit margin goals have such a direct and dilapidating affect on programming.”

Speaking to shareholders at ProSiebenSat 1’s annual general meeting in Munich on Tuesday, company topper Guillaume de Posch confirmed that there would be layoffs at Sat 1 as part of a channelwide revamping but stressed that the cost-cutting was the decision of the group’s management alone and not done at the behest of KKR and Permira.

De Posch, however, has been eager to boost the group’s profit margins since the $4.4 billion SBS takeover, which was largely financed through credit.

Sat 1 has already cancelled three news shows, including afternoon, evening and latenight news programs. While de Posch declined to say how many staffers would be shown the door, insiders are expecting up to 180 layoffs at Sat 1 alone in the Berlin and Munich offices, in both programming and management.

Local reports have indicated ProSiebenSat 1, which operates five free-to-air channels in Germany, plus SBS’ 19 free TV outlets around Europe, is set to eliminate up to 10% of domestic staff, numbered at some 3,100.

Under German law, TV channels must meet certain social and political criteria, such as offering a full range of programming that includes a balance of news, series, movies and sports, to be considered comprehensive or general-audience stations.

German politicos have joined the call for a review of Sat 1’s cuts in news programming.

“If Sat 1 no longer meets the criteria of a comprehensive channel, we will have to think about the consequences,” Helmes warned, adding that “theoretically, Sat 1 could lose its broadcasting license.”

ProSiebenSat 1 also operates news channel N24, which is facing possible cuts but could also provide news programs to sister nets such as Sat 1.

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