Leading Slovak Broadcaster Sold to US Company

Michael Hedges January 20, 2005

Privately held radio broadcasting and transmission facilities company D.EXPRES has been sold to Emmis Communications Corporations for €11m ($US14m).

D.EXPRES owns and operates Radio Expres, a national radio network covering the Eastern four-fifths of Slovakia, and several tower and broadcast facilities sites. Radio Expres is the leading privately owned radio network in Slovakia, programming an adult-contemporary (AC) format from studios in Bratislava.

Emmis purchased stock of D.EXPRES from the Slovak Post-Privatization Fund, a venture fund created by the European Bank of Reconstruction and Development (EBRD). The Slovak Post-Privatization Fund is managed by East Fund Management, a joint venture of Alliance Capital Management and Bank Austria Group/Creditanstalt. D.EXPRES was created in 1999 from a privatized State-owned broadcast facilities company.

Radio Expres was licensed in 1999 with a five-year concession. In a statement announcing the purchase January 11th, Emmis said closing would be in the first quarter, subject to regulatory approval and other due diligence.

Emmis International owns 9 FM stations in Flemish Belgium. It operates and owns substantially all of Slager Radio in Hungary. In December 2003 the company sold two radio stations in Buenos Aires, Argentina.

According to 2nd quarter 2004 MML audience survey from Median SK released in October 2004, Radio Expres had a 15% market share, second to public channel Radio Slovensko (24%). French owned Fun Radio had a 9% market share. Slovak owned Radio OKEY had a 8% market share.

Competition from privately held radio channels has eroded the market shares of public channels, though Radio Slovensko continues to lead the market and SRo 3 Rock FM and SRo 4 Radio Regina hold competitive positions. Public radio is supported by license fee and advertising.

Public radio broadcaster Slovak Public Radio (SRo) had been threatened with a loss of its state subsidy. Parliament members complained in August 2004 that SRo had not met required reforms. A €4.7m boost in state aid was announced by the Finance Ministry January 10th.

Slovakia is widely viewed as the most economically stable of the 10 new members of the European Union. Citing progress in fiscal reform, Moody’s Investor Services recently improved Slovakia’s long-term and short-term liabilities ratings. Unemployment, at 17%, is the second highest in the European Union. US company Johnson Controls announced a €20m investment, building a new manufacturing plant in southern Slovakia employing 350. Slovakia leads the European Union members in direct foreign investment per capita.