CME has been an ever-present in Central and Eastern Europe’s TV industry for 15 years and is likely to remain so for many more to come.
However, recent events point to its involvement developing into something quite different to what we have seen up until now.
The global economic crisis and resulting slump in ad revenue has clearly had a profound effect on the company, which has TV interests in no fewer than seven regional countries. As a result, it took the unprecedented step earlier this year of securing Time Warner as a 31% shareholder in a deal worth $241.5 million (€171.6 million).
Things moved a stage further this week, when CME announced it was effectively spinning off its least profitable operations, which happen in be in Ukraine, a market the company has been present in for over a decade, and Bulgaria, where it is a relative newcomer.
By doing so, and concentrating its efforts on more lucrative countries such as the Czech Republic and Romania, and perhaps also entering new ones (CME is believed to be one of several companies currently in talks to buy a controlling stake in Poland’s TV Puls), it hopes to return to profitability by 2011.
It has since moved extremely quickly in announcing a deal in Ukraine that sees Igor Kolomoisky, a leading local businessman and also CME shareholder, become a 49% owner of the company’s Ukrainian interests, which include the national commercial station Studio 1+1. Crucially, he brings his own station (TET TV) into the CME ‘fold’ and also has an option to buy CME’s 51% stake in the Ukrainian interests for $300 million in cash.
CME still clearly has a future in Ukraine, but it also now has an exit strategy.
Meanwhile in Bulgaria, where CME’s interests include the national station PRO.BG, the company has just announced a new multi-year programming deal between PRO.BG and Warner Bros International Television Distribution (WBITD). It may be followed by a partnership between CME and a local investor along the lines of that in Ukraine.
Further spin offs in other CME markets could also be on the cards.
