CME’s decision to sell its broadcasting assets in Croatia and Slovenia was a surprising and yet at the same time highly important development.
As someone who has followed the company’s activities in Central and Eastern Europe for almost a quarter of a century, and indeed visited most of its TV stations over the years, this for me ranks as one of the most significant milestones in its long history.
While it will not be the first time CME has pulled out of a market – it exited Poland (TVN), Ukraine (Studio 1+1) and Hungary (TV3), each in very different circumstances – what makes this unique is that it marks the withdrawal from an entire region – Adria, or the former Yugoslavia.
Looking at the figures, it probably made sense for CME to choose Croatia and Slovenia for the chop: taken together, they only accounted for just over 17% of its net revenues in Q1 this year.
One could also argue that its interests in Bulgaria and Slovakia are the next most likely to be sold, should indeed CME pursue such a strategy. The income it makes from the two countries is not much greater than that from Croatia and Slovenia, and less than half from its top performing markets Romania and the Czech Republic.
However, CME may stop at this sale and concentrate on its four remaining markets, in all of which, it has to be said, it faces extremely strong competition.
Time will tell if it’s made the right decision. Personally, I’m convinced it blundered in choosing to sell its stake in Poland’s TVN, a station it jointly launched with a local partner, back in the 1990s. Today, TVN is owned by Scripps Networks Interactive and one of the most dynamic broadcasters in CEE.
On the other hand, exiting Ukraine, a challenging market on many levels, was probably correct, while deciding to leave Hungary was a sound call, given that it only held a regional licence and could not compete with the likes of RTL Klub and TV2.
On balance, I think it’s also made the right decision with Croatia and Slovenia. What really matters now, though, is the strategy it adopts in its remaining four markets.