CME Fights for Czech Digital TV; Lauder Wins Klimt

Michael Hedges June 22, 2006

Once again Central European Media Enterprises (CME) takes on Czech authorities. Three years ago the Czech government lost in arbitration and paid the company $350 million. Now CME is challenging an unfavorable digital licensing decision. When Chairman Ron Lauder goes after something – as the art world discovered this week – he can reach into very deep pockets.

A month ago the Czech Radio and Television Broadcasting Council (RRTV) finally awarded new digital broadcasting licenses. TV Nova, owned by CME, applied and lost out.  Not pleased, the company has now taken the regulator to court, charging the RRTV with unfairly changed the tender rules.

TV Nova was the first privately owned TV channel in the Czech Republic and the flagship of CMEs Central and Eastern European strategy. Recent history has been difficult and expensive. Last year Czech ad agencies revolted over proposed rate increases and boycotted the channel. That problem was resolved after CME brought in Adrian Sarbu as Group President from its’ Romanian operation. Sarbu, also a shareholder in the Romanian channel Pro TV, is widely viewed as a tough manager, at the very least.

Ron Lauder, ranked number 258 in the latest Forbes list of rich people, clearly fights for what he wants. And he’s not reluctant to pay. Taking the Czech government to arbitration cost, arguably, millions. Suing the RRTV will also carry a heavy price. But buying Gustav Klimt's 1907 portrait of Adele Bloch - Bauer for an art world record breaking $135 million shows that Lauder has broad targets, personally and professionally.

Other trophies have recently come to CME and Lauder. The International Academy of Television Arts and Sciences bestowed on the company and its founder the International Emmy Directorate Award for “pioneering the development of independent television broadcasting in Central and Eastern Europe.”

“Our belief in the people of the region is exemplified in our business strategy which is based on working closely with local partners and placing an emphasis on locally produced programming,” said Lauder in a press statement announcing the award.

That local programming has also taken recent awards. CME’s Ukrainian channel Studio 1+1 picked up honors for locally produced programming at the Promax/DBA Europe Awards for TV design.

“About thirty seconds”  was Lauder’s answer to Bloomberg News’ Lindsey Pollack’s question about how long it took to decide to buy the Klimt painting.

Is he always that decisive, she asked?

The answer was – and is – “Yes.”

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