French broadcasters post losses on TV

Michael Hedges March 26, 2008

Getting into new businesses is costly. Both NRJ Group and NextRadioTV reported losses in the final accounting for 2007. Both companies have had wrenching experiences developing television products.

NextRadioTV, which owns national radio networks RMC and BFM, reported a € 11.7 million loss for 2007. Gross receipts, however, nearly doubled from 2006 to €105.1 million. The radio networks alone showed a profit of €16.9 million and an operating margin of 31.1%.

Much larger NRJ Group posted a much larger loss: €34.7 million, down 57% from 2006. Total sales dropped to €359.8 million from €398.2 million.

A month ago CEO Marc Pallain invoked terms familiar to shareholders and employees: “re-focus on core business.” That’s taken to mean NRJ will look for a buyer for its stake in transmission and tower company TowerCast. He also mentioned “reducing” the company’s international presence, meaning radio stations in Finland, Austria and “above all” Germany will be shed. For now, he’s holding on to stations in Belgium and Switzerland. It’s radio stations outside France lost €1.8 million in 2007.

NextRadioTv lost €14.2 million on TV channel BFMTV on €8 million in sales. NRJ Group lost €18.3 million in the TV business, NRJ12, primarily. Revenue grew to €8.7 million, a 135% increase over 2006.

But new projects for both companies abound. NextRadioTv CEO Alain Weill was ‘given’ the newspaper La Tribune to save. Marc Pallain said NRJ will continue “development of mobile telephone activities.”

Both companies released end of 2007 results Tuesday March 25.