RTL Group Q1 Revenues Drop 1.9% Due to Absence of ‘American Idol’

RTL Group, Europe’s leading entertainment network, saw revenues dip 1.9% to €1.405 billion ($1.5 billion) in the first quarter of 2017, the company announced Thursday. RTL said the drop was due entirely to the absence of FremantleMedia’s “American Idol” on U.S. network Fox.

“Following the exceptionally strong first quarter 2016 with an early Easter, we have returned to regular business in the first quarter of 2017. Nonetheless, our profitability remains on a high level, and we will continue to significantly invest in digital and content,” said RTL Group co-CEOs Bert Habets and Guillaume de Posch in a statement released Thursday morning.

EBITDA was down 8.3% at €264 million ($287.2 million), which RTL said was largely due to lower profit contributions for soccer club Girondins de Bordeaux and FremantleMedia. Despite the year-on-year decline, the €264 million is still RTL’s second-highest first quarter EBITDA.

RTL said the absence of “American Idol,” which aired its final season on Fox mainly during the first quarter of 2016, more than offset the higher revenue from Mediengruppe RTL Deutschland, Groupe M6 and the group’s dynamically growing digital business, resulting in the net loss. It was a key factor in FremantleMedia seeing its EBITDA down 31.6% to €13 million ($14.1 million) during the first quarter.

Habets and de Posch insisted that first-quarter results were not necessarily an indicator for the full year, saying this was especially true for FremantleMedia, whose adaptation of Neil Gaiman’s “American Gods” launched on U.S. pay-TV channel Starz on April 30. “We can only emphasize once more that the content business cannot be managed on a quarterly basis,” the co-CEOs said in their statement.

“The launch of ‘American Gods’ on Starz and on Amazon Prime Video in more than 200 territories will have a positive impact on FremantleMedia’s revenue in Q2,” said Habets and de Posch, who highlighted the news that “American Idol” would return to U.S. television on ABC. “Both are proof of what we have said before: exclusive content is the power engine for everything we do in the total video universe.”

Adjusting for the “American Idol” effect, the company said the group had recorded growth of about 4%, in line with its expectation of an increase in total revenue of 2.5% to 5% for the year. Digital revenues continued to be a key growth driver, up 48.3% year-on-year.

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