BERLIN — There was good news and bad news from Haim Saban’s new Teutonic broadcaster ProSiebenSat 1 on Thursday.
Germany’s biggest broadcaster reported that it tripled its second quarter net profits to e32 million ($36 million).
Yet despite profits from its five channels, the group recorded a 6% drop in quarterly revenues to $530 million due to the advertising slump and a half-year net loss of $900,000 on revs of $997 million, down 11% from the first half of 2002.
Company, which suffered a $37 million first quarter loss, cut costs across the board, including 11% from programming and material expenditures, which were trimmed to $717 million.
ProSiebenSat 1 prexy Urs Rohner was upbeat about the figures. “Business developed more positively than expected,” he said. “The cost-cutting measures kicked in and the performance of our stations improved significantly over the past 12 months.”
Saban, who is backed by five equity investment groups, is expected to restructure ProSiebenSat 1 to improve profit margins.
The Israeli-American billionaire plans to keep Rohner and ProSiebenSat 1’s management team and is not considering job cuts. But he will be hands-on in his approach, according to Saban sources, who add that he won’t change the “basic philosophy” of the channels.
The new owner is backing a capital increase for ProSiebenSat 1 that would raise around $300 million to finance further growth, strengthen the capital structure and lower debt. The broadcaster has already cut its liabilities this year by 6% to $1.3 billion.
Rohner welcomed Saban’s takeover of the group, saying ProSiebenSat 1 would have a “stable ownership structure and the necessary peace to concentrate on the operational business. We will profit from Haim Saban and his co-investors, who are perfect partners for us. Now it’s important to finalize the acquisition as soon as possible.”
Half of Teutonic TV market
ProSiebenSat 1, the core division of the insolvent Kirch Media group, controls roughly half of Germany’s commercial TV market but has lost ground to market leader RTL during the past year. However, its market share rose slightly to 28.9% among its 14- to 49-year-old target viewers in the first half of the year.
Since the collapse of Kirch Media last year, ProSiebenSat 1 has reworked output deals with nearly all of the major Hollywood studios, most recently with Sony for blockbuster movies like “Spider-Man” and “Terminator 3: Rise of the Machines.” It has also acquired the most valuable titles from Kirch Media’s film library as well as rights to European Champions League soccer.
Kirch Media’s creditor banks approved Saban’s second offer of $1.3 billion for ProSiebenSat 1 on Aug. 5 after his initial offer fell through in June.