MIPTV buyers waiting for prices to fall

Budget cuts will force creativity at Cannes confab

Special report: MIPTV

COLOGNE, Germany -- This year's MIPTV confab is shaping up to be less "Show me the money" and more "Where is the money?"

Feeling the pain of double-digit drops in advertising revenue, broadcasters throughout Europe are squeezing their budgets until they scream. The U.K.'s BBC wants to lop $580 million off its expense column, Germany's ProSiebenSat.1 is targeting $125 million in cuts, and France's TF1 is chopping $75 million.

Bidding adieu to those fat checkbooks, buyers will have to be a lot more creative heading into those Cannes meetings, which begin Monday.

"I think we are going to have to steal the programs," said Jeff Ford, head of acquisitions at U.K. commercial network Five. "We're going to go into the studio meetings and then walk out with the DVDs, and I think that's how we are going to get shows on air."

Ford is joking, but the days of brinkmanship bidding and eye-watering buyout prices are definitely over. Hardest hit have been channels in the U.K., Spain and Eastern Europe, where local economies are reeling. But the recession is global, and no one has been spared.

RTL Group CEO Gerhard Zeiler forecasts a double-digit revenue decline for the German TV industry this year, after near-record results in 2008, and even "crisis-proof" Scandinavia is feeling the pinch.

This isn't all bad news, especially for the studios. Foreign broadcasters tend to buy local when times are good, but recessions often boost acquisitions, particularly those of high-quality, ready-out-of-the-box dramas.

"Acquisition is really very cost-effective," said Daniela Bugliani, acquisition and co-production manager at Italy's Mediaset. "You can buy more, and at a very high quality."

Indeed, while publicly funded broadcasters are under political pressure to boost local commissions -- Channel 4 has slashed its acquisitions budget in favor of British programming, and France 2 and 3 are turning to Parisian producers to fill gaps in their schedules -- commercial broadcasters are screaming, "U.S.A.! U.S.A.!"

Channels like Spain's Cuatro are shifting cash from local productions to fund U.S. deals, and German giants RTL and ProSieben continue to pay top dollar for U.S. films and TV series, despite the gloomy economic outlook.

In one of the biggest recent deals, RTL outbid ProSieben to sign a multiyear agreement with Warner Bros. International Television that gives RTL German rights to more than 200 films and TV series.

"We weren't given this; we had to fight for it," said Dirk Schweitzer, head of program acquisition at RTL. "The prices haven't come down. The others are still paying out, and we are too."

The question is, for how long? The RTL-Warners deal aside, few expect many big buys to come out of MIPTV this year. Most execs will use the market as a fact-finding mission to check out new shows, waiting for the L.A. Screenings in May to get down to business in earnest. By then, if the economy continues to slide, the market could be very different.

"Top prices are coming down," Ford said. "And they will come down further."

Mimi Turner in London contributed to this report.
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