ProSiebenSat.1 CEO's plan to cut news budgets sparks outcry

BERLIN — With the economy still struggling, German commercial webs — like their counterparts in the U.K. and elsewhere — are wrestling with the cost of producing news and current affairs shows.

Thomas Ebeling, CEO of pan-European broadcasting group ProSiebenSat.1, got himself into hot water when he suggested cutting news budgets to save costs, saying that it’s politicians rather than viewers who care about coverage.

Ebeling, a pharmaceuticals exec until taking over the TV group a year ago, has run into fierce opposition from media regulators, political leaders and journalists for his proposal to ditch the group’s loss-making N24 news channel and cut ProSiebenSat.1′s e65 million ($89 million) news budget by about a third.

They dismiss his view that TV must make money like any other business, and argue that broadcasting is a cultural asset, with a lofty status and its own set of rules.

Ebeling’s comments have triggered a broader discussion about whether regulators should draft more detailed news content rules for commercial broadcasters in Germany, a country that requires webs to include news and information as a reaction to its Nazi past.

Deep-pocketed pubcasters ARD and ZDF are the dominant news sources, both airing two flagship newscasts seven days a week in primetime. They are publicly funded and can afford the pricey content.

Commercial webs RTL, Sat.1 and Pro­Sieben also have invested considerably in news, but only RTL has managed to win ratings — and standing — on a par with the pubcasters. Unlike other commercial webs RTL doesn’t interrupt its 25-minute nightly news broadcasts with advertisements.

Because of the daily deluge of commercial-free news coverage, the public is remarkably well-informed about government policies and what their elected leaders are doing.

But younger auds are less interested — which makes news a high-cost, low-return target for cost-cutting managers like Ebeling, who oversees 26 free TV and 24 pay-TV channels in Europe, all struggling with falling advertising revenues.

Ebeling, also facing a mountain of debt from ProSiebenSat.1′s 2007 acquisition of SBS Broadcasting, freely admits he watches the news on ARD and ZDF, saying, “I pay the viewer fees, too.”

But he doesn’t believe that commercial orgs should support money-losing content.

Speaking at a conference in Berlin this month organized by Germany’s DLM media regulatory commission, Ebeling said, “News is an add-on. Should we have e20 million losses per year for that or e40 million? How much should we have to lose?”

Ebeling went a step further, saying that even if ProSiebenSat.1 were in better financial position, he would spend the money on production.

That brought a warning from DLM chairman Thomas Langheinrich, who told the conference the commercial webs should voluntarily define what percentage of their programming costs should be devoted to news or face further regulation on minimum coverage.

“Broadcasters are not only businesses but also cultural assets,” Langheinrich said. “We want to make sure that commercial networks will be broadcasting news in the future.”

Christian Wulff, state prime minister of Lower Saxony, said it was essential that commercial webs continue to carry news, otherwise millions of young viewers who rarely watch the pubcasters would not see any news content at all.

Wulff said it had been wrong for the Commission on Concentration in Media to block publisher Axel Springer’s takeover of ProSiebenSat.1 in 2006, amid concerns that the combination of the broadcaster and Springer’s newspapers would have given it a dominating influence in the market. ProSiebenSat.1 was eventually bought by equity investment groups KKR and Permira.

“In retrospect that was a mistake,” Wulff said. “We’ve got to make it more difficult for investors motivated by profits.”

Jutta Limbach, head of the Berlin-Brandenburg MAAB media regulatory commission, said she understood Ebeling’s point that private webs couldn’t be made responsible for education deficits of youngsters who don’t want to watch the news.

“But a broadcaster is not just another for-profit company — not now and not in the future,” she said. “It enjoys special rights and has special obligations. It’s not an anachronism that broadcasters like Sat.1 or RTL are required to include news broadcasts.”

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