Thursday, March 17, 2011

RTL chief says X Factor producer FremantleMedia will not be sold

Gerhard Zeiler states he has confidence in new management despite 10% fall in profits

RTL chief executive Gerhard Zeiler has scotched speculation that The X Factor producer FremantleMedia could be sold, expressing confidence in new management to turn around a 10% fall in profits last year with a slate of new shows.

The company also revealed a ?57m (�49m) loss relating to the disposal of Channel 5, which was sold to Richard Desmond in July last year, as Europe's largest broadcaster reported a 44% rise in pre-tax profits to a record �1.06bn.

Zeiler hailed a "stronger than expected rebound" in the TV ad market in western Europe for what he called "outstanding results" which saw revenues rise 8.7% to ?5.6bn.

FremantleMedia, which owns subsidiaries including Talkback Thames which was hit by the cancellation of The Bill by ITV, had a mixed year with revenue up 7.5% to ?1.27bn but earnings before interest, tax and amortisation fell 9.7% to ?140m. RTL blamed the drop on "pressure" on margins and volumes from broadcasters".

In October Fremantle, which makes shows including The Apprentice, Deadliest Catch and The Price is Right, confirmed Sara Geater as the new chief executive of Talkback Thames.

Zeiler, in a results call with journalists, moved to scotch a speculative query about the possible future sale of FremantleMedia, or any of its subsidiaries, and he used the opportunity to support management at the UK operation.

"To squash every silly rumour we will not sell FremantleMedia, not 100% not 90% not 1%, and we also not sell Talkback Thames, not 100%, not 90%, not 1%," he said. "This is the core of our business. We had a change in the chief executive position, Sara Geater took over and we are very ... happy with what she has done since she is at the helm there and we are quite excited with the new development slate".

Zeiler said that the company would continue to look to build FremantleMedia, the division accounts for 23% of RTL's total revenues and 12.6% of earnings, through a strategy of "targeted acquisitions". Back in 2008 he pledged a doubling of Fremantle's then ?131m (�100m) earnings by as early as the end of next year.

In October Fremantle Media increased its stake in Ludia to become the majority shareholder in the Canadian developer of spinoff video games for TV shows including The Price Is Right and American Idol. In the same month the company took a 60% stake in US-based branded programming producer @radical.media, the production business behind Metallica documentary Some Kind of Monster and Britney: For the Record.

Despite Zeiler's bullish view on the rude health of RTL's assets, the company owns 40 TV stations and 33 radio stations in 10 countries, he refused to give guidance on the performance of the company this year.

"Despite the fact that TV profited more strongly than other media from the economic recovery in 2010, it is not possible to give reliable full-year guidance for 2011 at this point in time," he said. "As a consequence, RTL Group remains cautious while at the same time being very optimistic about the TV industry's overall growth prospects".

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Source: http://www.guardian.co.uk/media/2011/mar/10/rtl-x-factor-freemantlemedia

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