RTL revenue/profit down sharply in Q1

Biz down as advertisers scale back TV spend

COLOGNE, Germany -- RTL Group, Europe's largest television company, took it on the chin in Q1 with a double-digit drop in revenue and operating profits slashed in half compared with this time last year.

The group, which owns channels including RTL in Germany, M6 in France and Britain's Five, booked operating (EBITA) profits of €87 million ($115 million) in Q1, a 53.7% year-on-year plunge. Overall revenue was off 11% to €1.2 billion ($1.6 billion).

Business was down across the board as European advertisers drastically scale back their TV spending. It is cold comfort then that RTL's flagship channels in Germany (RTL), France (M6) and the Netherlands (RTL 4) increased their overall audience share.

RTL is battening down the hatches -- crunching budgets from Madrid to Cologne to Athens.

Channel Five in the U.K. has announced the biggest job cuts but the pain will be felt everywhere.

A rare bright light was RTL's production subsidiary FremantleMedia, which continues to ride the “American Idol” gravy train. Fremantle is taking an anti-cyclical approach to the current crisis and is eying new acquisitions to complement its production portfolio. In February, the group acquired 75% of U.S. reality specialists Original Productions, the creators of “Ice Road Truckers.”

Fremantle on Thursday also announced a deal with U.K. format group Magnum Media -- maker of Channel 4's “Chris Moyles Quiz Night” to represent Magnum's entire slate worldwide. Fremantle will finance the deal through its' Talent Fund, an investment vehicle set up for such production partnerships. Similar Talent Fund deals have been set up between Fremantle and Ashton Kutcher's Katalyst, Bea Ballard's 10 Star Entertainment, Trevor Eve’s Projector and Rob Brydon’s Arbie production outfits.