Big Broadcasters Believe in Bulgaria

OK, it’s always about the money. Who’s kidding whom. But Bulgarian radio revenue is just now moving past €6 million per year. That’s hardly enough money to attract News International, Emmis International, SBS Broadcasting and Communicorp.

All – with the possible exception of SBS – are strategic investors, eager to expand the portfolio of profitable operations. SBS was taken over by Kohlberg Kravis Roberts and Permira, two huge venture buy-out groups, and widely seen as an eventual spin-off target. Until the right buyer comes along – read: deep pockets – SBS will continue to expand its radio holdings and fight for ad shares. All four companies are widely respected as good radio broadcasters, serious competitors and profitable.

ftm background

Communicorp Scores a Quasi
Ireland’s Broadcasting Commission granted “quasi-national” authorization to Newstalk 106, a Dublin local radio station majority owned by Communicorp. The ten-year license with “strong emphasis” on news and talk will bring certain competition to private channel Today FM and public broadcaster RTE.

Another Big Broadcaster Buys Into Bulgaria
Barely one month after News Corporation expanded its broadcast holdings in Bulgaria, SBS Broadcasting bought national radio channel Vitosha FM and 2 local stations. Both follow Emmis International and Communicorp into the country, short-listed for European Union entry in 2007.

SanomaWSOY, Axel Springer, Ringier, WAZ and Handelsblatt Expand, Consolidate East European Operations. Lagardere Looks to US Hispanic Market
The announcement by SanomaWSOY of its €142 million takeover of Dutch-owned Independent Media, Russia’s largest publisher of consumer magazines, marks yet another continuing step by Europe’s leading publishing houses to become dominant players on the East European media scene.

Big Media Rushes Into Next EU Accession Countries
Just being “in talks with the European Union” is good enough to send media investors cruising the streets looking for deals. As countries turn themselves up-side-down conforming to EU accession demands, big media companies bring cash and expertise intent on cornering the markets early…but not too early. So far, this strategy works. But, how far east can it go?

Communicorp is adding Retro Radio and Radio Gong to three channels it acquired in the Metromedia purchase two years ago – BG Radio, Nova Radio and 75% of Radio 1. And it is developing the NRJ brand under a license agreement with the French NRJ Group. The 70% holding in Retro Radio is valued at €3 million, according an article in Dnevnik.

A report by the Association of Bulgarian Broadcasters (ABBRO), quoted by the Sofia Echo, concluded that 15% of Bulgarian radio stations – national stations and chains – benefit from 90% of radio ad spending.

None of this is lost on public broadcasters Bulgarian National Radio (BNR) as it struggles with funding and management issues. In May the European Broadcasting Union (EBU) conducted a high level conference in Sofia to tackle financial problems. BNR, highly regarded by EBU, is funded through license fee and advertising.

There are two observations from all this activity in Bulgaria, both good for broadcasters and media consumers. The political cronies who held licenses over the last decade and a half but did little with them are selling out. With EC accession on the horizon and people with money at the door, they must believe that selling is in their best interest.

Radio advertising increased 15% from 2004 to 2005, excellent compared with Western Europe. Big companies – with well-honed sales skills – will only expand that market and create competitive choices for listeners.

We can only expect more high level investment in countries short-listed for EC expansion – and even those on the very long list.

Big Broadcasters Believe in Bulgaria

As Communicorp finalized its acquisition of two more radio stations, the Bulgarian media market is set for a unique battle. Nowhere in Europe have so many big multinational media companies engaged in a fight in one market. And it’s not about the money…