ProSiebenSat.1 CEO to Step Down, German TV Giant Becomes Possible Takeover Target

Thomas Ebeling - H 2013

Thomas Ebeling will resign a year earlier than planned, as the company's shares slide and international buyers circle.

Thomas Ebeling, CEO of German television group ProSiebenSat.1, has announced he will be stepping down in February, a year earlier than planned.

The move, announced Sunday night, has sparked speculation about the future of the company, which operates several free and pay TV channels in Germany but has been hard hit by increased competition from online streamers Netflix and Amazon Prime.

Ebeling has been head of ProSiebenSat.1 since 2009 and, according to an official statement from Werner Brandt, ProSiebenSat.1 supervisory board chairman, proved himself to be “one of the extraordinary corporate personalities in the media industry.”

But Ebeling and ProSiebenSat.1 have been under fire of late. The company's free-TV flagships, ProSieben and Sat.1, built their reputation, and audience share, on U.S. films and series such as The Big Bang Theory, The Simpsons and NCIS. While those shows continue to draw German viewers, it has been years since ProSiebenSat.1 has had a new imported hit. Recent attempts, such as Empire and This Is Us, flopped. The company, like all commercial broadcasters, is also under fire from Netflix and co.

ProSieben operates its own online streaming service, Maxdome, with more than 1 million subscribers in Germany but the division is still a money loser. Ebeling had initially forecast a breakeven for Maxdome by the end of this year but in September backed away from that promise, saying he now expected the streamer to move into the black by 2018.

ProSiebenSat.1 has had to downgrade its earnings and profit forecast for the year, sending stock in the company tumbling, with shares down more than 30 percent year-on-year. Ebeling didn't help matters when, in a recent conference call, he described ProSiebenSat.1 viewers as “a bit fat” and “a bit poor,” comments that were roundly condemned. Ebeling later apologized.

Outside of Germany, ProSiebenSat.1's woes could be seen as an opportunity. Ian Whittaker, analyst with U.K.-based Liberum Capital Limited, sees the German broadcaster as “an obvious M&A target,” with Comcast-owned NBCUniversal as an obvious buyer. “NBC has previously expressed interest for ProSieben,” Whittaker wrote in a note to investors Monday, “it knows the German TV ad market and could offer significant cost synergies for ProSieben's US-heavy programming grid.”

This isn't the first time ProSiebenSat.1 has been an acquisition target. Haim Saban's Saban Capital Group lead a team of investors that bought out the German broadcaster in 2003 for around 500 million euro ($595 million). In 2006 Saban sold on ProSieben to private equity groups Permira and KKR for around 3 billion euro ($3.8 billion). Permira and KKR eventually sold off their stock in stages and finally exited the company in 2014.
NBCUniversal couldn't immediately be reached for comment.

Georg Szalai in London contributed to this report.