Berlusconi: ProSiebenSat.1 should focus on core business

(Source: ProSiebenSat.1)

ProSiebenSat.1 should consider disposing of its digital and e-commerce businesses to focus on its core TV and entertainment offerings, according to Pier Silvio Berlusconi.

Berlusconi, CEO of MediaForEurope (MFE), the German broadcaster’s biggest shareholder, told a press briefing last week that ProSiebenSat.1 faced difficult circumstances because of Germany’s highly challenged advertising market, but that it was nevertheless underperforming the market.

Berlusconi said that the broadcaster should look to monetise its digital and e-commerce activities as far as it could and reinviest the proceeds in the entertainment business.

ProSiebenSat.1 said in November that it now expected full-year earnings to be at the lower end of the range forecast at the beginning of the year because of a slower than expected economic recovery in Germany, despite a boost in advertising sales from its Joyn streaming service.

Advertising revenues declined by about 5% in the third quarter, with overall revenues dropping 3% to €888 million, a smaller decline than that experienced in the first half thanks in large part to growth in digital from Joyn. Digital advertising was up by 16%, boosted mostly by Joyn and also by audio sector sales.

ProSiebenSat.1 posted adjusted EBITDA of €110 million for the quarter, slightly up on the €108 million for the prior year thanks to cost cutting. However, adjusted EBITDA for the first nine months is still tracking below that of last year.

Problems with the higher margin advertising business meant that adjusted EBITDA in the entertainment business itself declined by 7% to €85 million.

While attributing the decline in ad sales to Germany’s economic problems, ProSiebenSat.1 also lost audience share in third quarter, with its family of linear channels achieving a share of 24% in the 14-49 age group, down from 25% for the prior year.

MFE holds a 29% stake in ProSiebenSat.1, built up over the last four years.

Berlusconi also said that MFE’s ambition to create a pan-European broadcasting group was attracting interest in other European markets, including Portugal, without giving further details.