The decisive actions taken by CME to save its TV interests in the CEE region appear to have succeeded, though the company is by no means yet out of the woods.
There is certainly a good deal to cheer about in its latest set of results, which show an improvement on the same period last year, when the industry was operating in the midst of a global recession. Net revenues and net income are both up, though one should factor in the effect of the major deals CME has recently completed. Besides the sale of its interests in Ukraine and acquisition of bTV and associated companies in Bulgaria, they include the integration of Media Pro Entertainment into its operations.
Adrian Sarbu, CME’s president and CEO, has already pointed out that only two of its six markets – the Czech Republic and Slovenia – have shown the first signs of recovery in the first half of the year. Yet even these are marginal, with net revenues in the former in Q2 up by only $812,000 year-on-year and actually down by $261,000 in the latter.
Though the performance in other markets is more patchy, it is much more acceptable than that seen last year in Ukraine, where CME did appear to have real problems.
Of particular interest is the growing importance of Media Pro Entertainment to CME. The company, which is one of the leading producers and distributors of TV fiction in the CEE region, was acquired from Sarbu exactly a year ago and grew its revenues in both Q2 and H1 this year. Moreover, these revenues are now higher than those for CME’s broadcast operations in all but two markets (Czech Republic and Romania).
CME is also enjoying growth in its new media division, though revenues are still a small fraction of the company’s total.
Although the worst of the crisis is undoubtedly now over for CME, the company’s recovery will in large part be determined by the performance of TV advertising markets across the region. These have undoubtedly started to grow again, though the process is likely to be slow.