“Expect a New Burst of Creative Energy”

Michael Hedges June 2, 2005

John de Mol’s Talpa Media expands radio holdings, purchasing Netherlands’ station Radio 538.
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The radio deal of the month award goes to Talpa Media Holdings and Advent International for the purchase and sale of the top rated Dutch station. The agreement was announced May 23rd and takes effect May 31st. A spokesperson for Advent International said financial details, as a matter of policy, would not be disclosed.

With this acquisition Talpa Media becomes the first company to hold more than one radio license in the Netherlands, keeping Radio 10 Gold but selling Noordzee FM to Belgium publisher Persgroep to avoid regulatory complications. Talpa Media picks up hip hop and R’n’B web station Juize.FM launched by Radio 538 in July 2004.

Talpa Media also owns 100FM in Denmark and 4FM in Flemish Belgium. 100FM is the top ranked Danish commercial radio station, according to the 1st quarter TNS Gallup Radio Index, with a 5.6% market share.

Persgroep and Talpa Media have recent history together beyond the transaction for Noordzee 100.7FM. Persgroep owns Het Parool, a national daily tabloid that leans toward Amsterdam, several newspapers in Flemish Belgium as well as Vlaamse Media Maatschappij, which owns radio station Q-Music. When Talpa Media purchased 4FM in January management, sales and technical support were contracted to Vlaamse Media Maatschappij. In 1st quarter 2005 CIM radio audience survey of Flemish Belgium, 4FM increased market share to 4.7% over the previous quarter while Q-Music zoomed to 12.2% from 6.8%.

Radio and the soon to go on the air television Tien are part of a larger multi-media strategy, said de Mol in several published interviews after the transaction was announced. In a separate interview Radio 538 general manager Jan Willem Brüggenwirth made reference to exploiting the “cross-media creativity.”

Radio 538 launched in 1992 and investment house Advent International purchased a 90% stake in late 2003. In the most recent Dutch radio survey Radio 538 holds a 11.5% market share, with over 3 million listeners, and is the highest rated radio station. It recently overcame Sky Radio in a battle of big budget marketing.

Advent International is left with three radio stations, soon to be one. Polish market leader Radio Zet is part of a joint venture, Eurozet, with Lagardère owning 40%. Lagardère is expected to take Advent's shares by summer. The Hungarian station, Radio Danubius, is also a strong market contender. As an investment house, Advent International is seen as a developer, and one with an exit plan.

And Central Europe is viewed as an attractive market for both financial investors, like Advent, and strategic investors like Ron Lauder’s CME and Denis O’Brien’s Communicorp. SBS and MTG have consolidated holdings and operations in Scandinavia. Some consolidation might follow the GCap merger and Ulster TVs take over of The Wireless Group but most strategic and financial investors looking at radio in the UK say prices – including cost of highly competitive operations - are still too high.

The Netherlands and Belgium are seen as increasingly attractive for media because of a good business and regulatory climate as well as a creative and aggressive advertising sector tuned-in to all media. Add Denmark to that – the most internet active country in Europe - and it’s potentially a very exciting region. 

John de Mol
Radio Pirate No More

Talpa Media is but one company under the umbrella of Talpa International. Talpa Capital held then sold 12% of Hit Entertainment, producer of kid TV hit “Bob the Builder.” Hit Entertainment was taken over by venture capital firm Apax Partners last week after de Mol tried to sweeten the deal and secure rights in the Netherlands, Belgium and Denmark for himself. Apax bought Hit Entertainment for £475 million but not de Mol’s deal.

John de Mol again made Forbes’ World’s Richest People list, ranking 321th for 2005, down from 310th the previous year.  He made most of his estimated $2 billion five years ago selling reality TV production company Endemol to Spain’s Telefonica. Ron Lauder is number 219, up from 277th last year. Forbes’ reported that John de Mol’s non-compete agreement with Endemol expires this year and to “expect a new burst of creative energy.”

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Sky Radio Shutdown and Sell Off – November 13, 2005

Commercial radio is certainly a tough business. And when the toughest in the business, Rupert Murdoch, decide to get out it’s a sign of the times. Last Thursday News Corporation let its’ displeasure known to Danish authorities by closing the Sky Radio P5 franchise, effective Monday, November 14th.

Sky Radio was the first commercial radio operator in Denmark and the company said it lost €9.5 million last year. The company complained that Danish authorities failed to provide promised signal coverage – and they plan to seek damages – but ad revenue clearly isn’t there. Sky Radio pays a €7 million annual license fee.

Two years ago US broadcaster Clear Channel vacated Denmark and Norway, selling to SBS Broadcasting. SBS was recently sold to venture capital group Kohlberg, Kravis and Roberts

In September investment banker Goldman-Sachs was retained by News Corporation to shop “non-core assets,” financial spin for getting out of money losing businesses with little prospect of turn-around. A deal for the Sky Radio Dutch franchise is reportedly close with Telegraaf Groep dancing in the €250 million range.

Advent International Completes Poland Radio Exit - June 18, 2005

The sale of Radio Kolor to local investors, announced last week, follows within two months the sale of Advents’ shares in Eurozet, owner of Radio Zet and sales house RRM, to Lagardère and Radio 538 in the Netherlands to Talpa International.

Advent Internationals’ remaining investment in European radio is Hungarian station Radio Danubius.