German TV Giant ProSiebenSat.1 to Renegotiate Hollywood Output Deals
ProSieben is shifting its focus away from U.S. series in favor of local productions as third-quarter results show a fall in profit and revenue.
German television group ProSiebenSat.1 is asking Hollywood to cut it some slack.
The broadcast giant, which currently has volume or output deals with four Hollywood studios, is looking to renegotiate terms as profits and revenue slump in its core German free-TV business.
ProSiebenSat.1's results, reported this week, showed that net profit for the first nine months of 2018 was down 8 percent and revenue off 3 percent compared to the same period last year. The group, which operates several free and pay-TV channels in Germany, says it now expects full-year revenue to drop in the "low-single-digit percentage range" to around €4 billion ($4.58 billion).
ProSiebenSat.1 CEO Max Conze said the company was now reviewing its existing U.S. studio contracts to see if they can be renegotiated.
"ProSiebenSat.1 has approached the respective licensors in order to achieve relevant improvements in the scope of rights and/or volume inflow for license volumes both from existing agreements and for future agreements," he said.
ProSiebenSat.1 has successfully closed a new licensing deal with Warner Bros. and is looking to do the same with its other Hollywood partners. The German group also has licensing deals in place with CBS, Disney and Fox, which require ProSiebenSat.1 to take a certain number of films and TV series from the U.S. studios.
The German group is one of the biggest buyers of U.S. series worldwide and, for years, a steady source of licensing revenue for its studio partners. ProSiebenSat.1's German channels are packed with U.S. series, such as Warner Bros.-produced The Big Bang Theory and The Flash and CBS' NCIS franchise. But American series are not the ratings guarantor they once were, as viewers desert to streaming services such as Netflix and Amazon Prime.
German audiences, following a pattern seen across Europe, are also shifting to more local series and shows. Red Arrow, ProSiebenSat.1's content arm, said it will be plowing money into the development and production of local shows and hopes to increase the company's share of local content commissions from 13 percent today to more than 30 percent over the next five years.