Success in Sofia

By Chris Dziadul
September 25, 2009

Acquiring Bulgaria’s bTV would undoubtedly be a good move for CME in what has so far been a highly eventful year.

It’s worth casting our minds back to where the company was at the start of 2009, when it was already clear the global financial crisis would have a devastating effect on its ad-funded TV stations throughout the region.

And so it proved when Q4 2008 results were published, showing a net income of around $73 million (€49.6 million) a year earlier replaced with a net loss of just over $323 million. Although no operation covered itself in glory, the one in Ukraine fared particularly badly.

Two quarters on, the results still looked bad – even Czech TV Nova, by far and away CME’s most lucrative operation, saw its operating income almost halve in Q2 2009 year-on-year – but the building blocks had been put in place for a recovery that should gather momentum in the coming months.

Indeed, by the middle of this year CME had already gained Time Warner as a strategic investor. Since then, it has mapped out an exit strategy from Ukraine, securing the local businessman Igor Kolomoisky as a shareholder in its Studio 1+1 operation, and been linked with a move into Poland, where TV Puls is still looking for a backer.

The company has also made a key acquisition in the content field, buying MediaPro Entertainment for a fee believed to be just under $100 million.

CME, it has to be said, already has a presence in Bulgaria through the national station Pro.BG and sports-based thematic channel Ring.BG, until recently known as TV2 and Ring TV respectively. But by acquiring bTV, Bulgaria’s leading station, it would automatically become the main player in a small though still important CEE market.

Of course the deal may not come off: what we have right now are speculative reports that appear to have some substance. But if it does, 2009 will almost certainly end on a much more positive note for CME than it began.