ProSiebenSat.1 Could Sell SBS Channels to Focus on German Market

Three years after spending $4.5 billion on pan-European broadcaster, German TV group may be looking to sell off channels.


COLOGNE, Germany -- Three years after spending $4.5 billion to buy pan-European broadcaster SBS, German TV group ProSiebenSat.1 may be looking to sell off channels in Scandinavia and Benelux to focus on the German-language market.

ProSiebenSat.1 boss Thomas Ebeling told German paper the Frankfurter Allgemeine Zeitung that individual channels could be put on the block but that he will not dump the entire SBS group.

"We will definitely not sell the entire SBS network of channels," Ebeling insisted. SBS controls channels across Scandinavia, Benelux and Eastern Europe.

Ebeling said ProSieben only wants to be in a territory if it can be one of the top three networks -- a position it holds in Belgium and the Netherlands but not, for example, in Bulgaria or Finland where SBS channels could be sold off. ProSieben has hired investment bank J.P. Morgan to review its SBS assets.

When ProSieben pushed through the $4.5 billion to buy SBS in 2007, critics said the price tag was too high for a network of commercial channels in small to middling-sized European territories.

The argument then was that growth, particularly in Eastern Europe, would make up for the more sated German market. Instead, while many European territories continue to suffer from the aftershock of the financial collapse of two years ago, the TV business in Germany has bounced back. ProSieben's channels in German-speaking Europe accounted for nearly 70% of its revenue in the first three quarters of 2010, up from 67% over the same period last year. Q3 growth in Germany was 21%, beating all the so-called emerging markets.

This summer, ProSieben sold off its news network N24 and production outfit MAZ&More and shifted headquarters for its flagship Sat.1 channel from expensive digs in central Berlin to corporate headquarters in a low-rent suburb of Munich.

A similar consolidation can be seen at competitor RTL Group, which dumped money-losing British network Channel Five and is focusing on strengthening its core, money-making German assets. For European broadcasters still feeling the chill of the economic downturn, ambition is out and efficiency is in.