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As financially challenged Italian media house RCS Media Group sheds non-core assets, its shareholding in radio broadcaster Gruppo Finelco is next to enter “exclusive negotiations” with private equity fund Clessidra according to a company statement reported by news agency ANSA (March 6). Gruppo Finelco owns national radio channels Radio 105, Virgin Radio and Radio Monte Carlo. RCS Media Group has held a 44% stake since 2007 in the company, founded and principally owned by Alberto Hazan.
When RCS Media Group made clear last year its intention to reduce its debt footprint Gruppo Finelco itself became a takeover target because of put and call option contracts between the primary shareholders. Eduardo Montefusco, owner of Radio Dimensione Suono, took a look as did Spanish broadcasters Blas Herrero (Kiss FM) and Atresmedia (Onda Cero) as well as UK radio broadcaster Global Radio. Clessidra Capital Partners, principally owned by Claudio Sposito, made a bid for for the RCS Media Group stake in Gruppo Finelco 13 months ago but the “very complex situation” ended negotiations. (See more on media in Italy here)
RCS Media Group also announced entering exclusive negotiations with publisher Mondadori for a asset sale of book publisher RCS Libri.
Media outlets, generally, pay great attention to issues of public confidence. The onslaught of new media and corresponding shifts in media usage have been shown to affect the trust people have in these institutions. The annual confidence barometer survey of Swedish institutions has once again placed Swedish public radio Sveriges Radio (SR) as the most trusted media outlet.
The survey results show 71% confidence in SR, followed by 67% for Swedish public television (SVT). Both have seen confidence ratings slide in recent years. “They are still at the top,” said TNS Sifo public opinion researcher Toivo Sjörén, “but we also see big changes in the media landscape.” Young people 16 to 29 years trust SVT slightly more than SR while 72% of older folk 60 to 74 years trust SR but only 64% trust SVT. Taken in aggregate confidence in radio and television outlets has risen to 51% from 47% in last year’s survey. Confidence in daily newspapers dropped to 26% from 29% one year on. (See more about media in Sweden here)
“Of course it is incredibly fun that once again we have the highest confidence of Swedish people,” said SR CEO Cilla Benkö in a statement (March 5). “It is important that we also build confidence in groups that might barely know who we are or what we stand for.” SR offers three national radio channels plus the 25 station local radio network P4, specialty FM stations in Stockholm and Malmo as well as several digital and web channels.
The confidence barometer (Förtroendebarometern) survey is prepared by Göteborg University and TNS Sifo and presented annually at the Gothenburg Media Days.
Investors punished big German media house Axel Springer in spite of good, and expected, year-end financial results. The reason, it seems, was rather basic: CEO Mathias Döpfner isn't sharing returns from selling off local publishing units. The dividend payable remains unchanged. The share price dropped to €54, roughly 6%, after the Wednesday (March 4) announcement.
“In the digital business, there is no publisher in Europe larger than Axel Springer,” said Herr Döpfner at the post-results press conference, quoted by media.de (March 5). Rather than making smiley faces at investor's piggy banks, he's spending evermore on digital acquisitions. “Our company has changed structurally and culturally. We will continue to invest in digital expansion this year.” (See more about media in Germany here)
Gross sales in 2014 were up 8.4% to €3.0 billion, the largest portion being from advertising, up 10.8% to €1.8 billion, three-quarters (74.5%) of that from “digital activities.” In the 2014 fiscal year Axel Springer earned 43.1% of sales revenue outside Germany, €1.3 billion, up 12.4%. Shedding local newspapers, women's magazines and titles in the Czech Republic owned by the joint venture with Swiss publisher Ringier added about €650 million to the investment kitty.
Digital subscriptions for legacy print brands Die Welt and Bild exceed 300,000 with serious money from employment, automobile and real estate portals. The planned joint venture to produce a European version of political news portal Politico, to be based in Brussels, hit a snag when the German trademark owner came forward looking for - and receiving - the obvious.
An e-book isn't “physical” and, therefore, sales cannot be taxed at a rate lower than printed books, judged the European Court of Justice (ECJ). The European Commission had referred France and Luxembourg to the ECJ for reducing VAT (value added tax) rates for e-book sales, 5.5% in France and 3% in Luxembourg, quite bit less than the normative 20% VAT rate. You can't do that, said the ECJ, because “electronically supplied services” aren't in the Annex of the VAT Directive that lists goods and services on which a reduced rate can be applied.
VAT reductions can be applied to books “on all physical means of support,” says the VAT Directive but, said the ECJ, the “physical means” to access e-books would be devices like computers, smartphones and tablets that aren't part of the transaction. The e-book VAT reductions in France and Luxembourg have been in place since 2012. Since then, Italian and Spanish authorities have also dropped VAT rates on e-book sales in line with rates applicable to printed books.
“I expected this decision,” said French Culture Minister Fleur Pellerin on public radio channel France Inter (March 5), “as did many publishers and authors. What counts is the work, not the medium.” E-book VAT rates were dropped, in part, as a reaction to pricing policies of online retailers such as Amazon. “With other countries, we will continue to advocate for so-called technological neutrality; to apply the same taxation, be it digital or hard copy.”
The disposition of the few remaining foreign shareholdings in Russian media has been subject to considerable speculation since a law to reduce foreign holdings and editorial control was passed last fall by the Russian State Duma. Television broadcaster CTC Media, registered in the US State of Delaware and traded on the NASDAQ exchange, would be effected by the law due to come into effect at the first of 2016 and, hence, watched carefully by financial and media watchers. The CTC Media board recently engaged the Zurich-based UBS investment bank and tax specialist KMPG to figure out a solution, the announcement of which caused stress on the company's traded shares.
Citing unnamed sources, the usually reliable Russian business publication Vedomosti reported (March 4) that Modern Times Group (MTG), the largest single shareholder in CTC Media (about 39%), had "received an offer" from the second biggest shareholder, Cyprus-domiciled Telcrest, principally owned by Russian billionaire Yuri Kovalchuk, which currently holds a 25% stake. Vedomosti is similarly under pressure as it is jointly owned by the Financial Times, Dow Jones (News Corporation) and Sanoma. (See more about media in Russia here)
A statement from CTC Media, hours after the Vedomosti lede was published, denied that MTG is "pursuing any separate process." CTC Media, offering four entertainment channels in Russia, has been quite profitable, benefitting all shareholders. Changes in the ownership and management structure or suggestions of such would affect already suspicious investors. MTG is also publicly traded with Investment AB Kinnevik as major shareholder.
Several big European publishers, including Bauer Media, Axel Springer, Sanoma, Bonnier and Egmont, appealed directly to Russian Federation president Vladimir Putin (February 24) for a one year extension in implementing the ownership and control law. A law restricting advertising, invoked at the same time as the ownership law, was subsequently amended, after which Time Warner allowed news channel CNN International to return to Russian distribution. Russian media and political watchers have noted a tide toward a similar amendment of the ownership law.
Among global news agencies Agence France-Presse (AFP) is acclaimed, prestigious and factually rigorous. Mistakes, of course, can happen. To err is human, right?
Over the weekend AFP ran with an item announcing the death of Martin Bouygues who, it turns out, had not passed on. A simple correction would have sufficed had this been a mere mortal but Martin Bouygues is a very important French person, CEO of industrial house Bouygues Group, owner of television broadcaster TF1 and Bouygues Telecom. AFP executives have been scrambling with apologies and explanations.
"This case is very serious," said AFP spokesperson Michéle Lèridon, quoted by news portal Rue89 (March 2). Dutifully, AFP released an explanatory narrative detailing, quite obviously, basic reporting errors one after another. Simply put, a reporter tried to follow a rumor and, being the weekend in France, the best sources available would only confirm that somebody died in the little village where M. Bouygues has a house.
"The journalist asked me if a Mr Martin was dead and I said yes," said the mayor of a nearby village. The deceased "Mr Martin" was not Martin Bouygues. The fire brigade also confirmed that "someone" had died. The Bouygues Group press contact wasn't available.
The AFP reporter attempted to communicate with the chief editor of the French national desk, who was not available. An assistant decided to run the item, in the spirit of being fast and furious. M. Bouygues was, then, presumed dead, the item picked up by other news outlets and, of course, social media. Half an hour passed - a lifetime figuratively - before somebody at TF1 communicated M. Bouygues' true state to somebody at AFP.
With great regularity public broadcasting chief executives set out in a chosen venue their view of the institution's future. In recent years the universal themes have been "the future is digital" and "the future is threatened." BBC director general Tony Hall offered a dose of both in a speech at New Broadcasting House.
"In future, we will have a new tool: individual data," Lord Hall revealed. "We'll give you your own BBC app, which will remember all your favorite programs, artists, music, interests, DJs and sports teams. All in one place." The BBC app will, of course, remember and recommend "public service" content, not to be confused with that other stuff, "not telling you what customers like you bought, but what citizens like you would love to watch and need to know."
"The BBC's future - and the UK's future - in the internet age are not guaranteed," he concluded. "We must take on the notion that the old ideals of public service broadcasting may become irrelevant. Because that notion affects what we decide now." (See more about the BBC here)
The deciders are, of course, the politicians. Last week the Culture, Media and Sport Select Committee of the UK Parliament issued its equally regular assessment of the future of public broadcasting, the BBC in specific. Topping their list is ditching the BBC Trust, seen by politicians as too much cheer and not enough spanking. The BBC's Royal Charter comes under review after the May general elections and will expire at the end of 2016. MPs also want BBC spending regularly and publicly audited.
Always filling a certain need during the political season is the license fee. UK MPs like the idea of scrapping the device-dependant fee for a household tax, potentially adding contributions of a half million folks. Both proposals - unitary governance and a household tax - borrow heavily from Germany's public broadcasting system, new since 2013.
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