Scandi B’casting revs jump in 1st quarter

Growth leads to boffo cash flow increase

AMSTERDAM — Strong revenue growth at most of Scandinavian Broadcasting System’s (SBS) TV channels led to an improved station operating cash flow (earnings before taxes, interest, depreciation and amortization) for SBS of some $10 million at its established stations.

SBS operates two affiliated networks in Norway and Denmark, a channel in Sweden, two channels in the Benelux and two in Central Europe. The group’s net revenue, including contributions from its newest channel in Hungary, jumped to $70 million in first quarter 1998, up from $48 million in first-quarter 1997.

Losses lessen

Station operating cash flow dramatically improved at the group, dropping from losses of $13 million in first quarter 1997 to losses of $3 million in for the same period this year, excluding figures from new SBS channel TV2 in Hungary. TV2 launched in October and has now become the commercial market leader in that territory. Including Hungary, station operating cash flow losses dropped from $13 million to $6 million.

Net losses at the group remained level at $15 million, but SBS chairman and CEO Harry Evans Sloan told Variety all stations except Danish network TvDanmark “would be profitable this year. Revenues are up across all channels,” he added, “some by as much as 77%. The stations are all performing better and the market itself is growing. Those two factors are compounding to produce dramatic results.”

Capital idea

Sloan says the group is currently on the hunt for further investments, probably in Central Europe — it also has a channel in Slovenia — but also in established western territories, including Holland.

Fox Kids Worldwide, which owns Dutch channel TV10, recently asked SBS Dutch subsid SBS6 to form a cooperative programming partnership. Sloan said he is looking seriously at the Fox offer and is not ruling out other possibilities, including running some sort of a joint channel. It is believed SBS6 might also be offered an option to buy 50% of TV10.

Former SBS shareholder Disney recently sold its 20% share in the company, which has been picked up by American as well as European investors.