The departure of Adrian Sarbu from CME marks the end of an era.
It’s probably true to say that he has presided over the company during the most difficult period in its 20-year history.
Being first and foremost a FTA broadcaster, it has had to contend with a big downturn in the TV ad market in Central and Eastern Europe. In its most recent set of results, published just a month ago, CME posted a net loss of $41.1 million for the second quarter, compared to a net income of $3.1 million for the same period last year.
Worse still was its performance in the Czech Republic. Its entry point into the CEE region two decades ago and long regarded as a ‘cash cow’, the company’s operations there had revenues of $49.7 million in the second quarter – a huge fall on the $76.9 million posted a year earlier.
CME has responded in a number of ways to what have now been several quarters of disappointing results. One of these, undertaken earlier this year, was to significantly increase the cost of commercial airtime in the markets it operates in – in double digit terms in the Czech Republic and single digits elsewhere. A risky move, it still has the full support of the board despite Sarbu’s departure.
It’s important to note that Sarbu has resigned rather than been sacked by CME. He will also remain in his post until the end of the year in order to ensure a smooth transition.
What is more, Sarbu will receive severance pay of $5.4 million and can expect to benefit from an investment of up to $3 million from CME in an audiovisual business he plans to set up.
He also has a preferential right to buy CME’s assets in Romania up until 2015, should the company decide to sell up in the country.
Although Sarbu will clearly still have links with CME following his departure, 2014 will mark the start of a new phase in the company’s development.
