TV3's revenues rise 2% as digital channel income grows, but debt fuels €6.8m loss
TV3 GROUP’S revenues nudged up 2 per cent in 2011 despite a “storm” in the media sector, but the company made a loss of €6.8 million loss as interest payable on its debt and other items pulled it into the red.
The company’s turnover advanced to €59 million last year thanks to growth in revenues at its digital channel 3e and positive trends in online advertising.
The broadcaster, owned by venture capital firm Doughty Hanson, had a 28 per cent rise in earnings before tax and write-offs to €5.5 million, with operating profit at €3.7 million, up from €2 million.
“Given the storm that is out there in media, we’re pretty pleased to have 28 per cent earnings growth,” said chief executive David McRedmond.
The growth came from the renegotiation of contracts, rather than from a bounce in the advertising market, he added.
Advertising revenues were “highly volatile” in 2012, with the second half of the year proving “very tough”, according to Mr McRedmond. He said the group was now “battening down the hatches” until 2013.
3e’s revenue rose almost 8 per cent to €4.2 million last year, as it increased its audience share. The channel – which recently recorded a share of 1.8 per cent, close to that of TG4 – is likely to receive a further boost in viewers following the conversion of analogue television households to digital.
Mr McRedmond said the target for TV3, which has a share of about 13 per cent, was to hold its position. Its share was dented during the summer when viewers turned elsewhere to watch the Euro 2012 football championship and the London Olympics, but had been level on 2011 up to that point.
The group now wants to launch a range of channels on digital terrestrial television, including a time-shifted TV3+1 channel and, eventually, TV3 HD.
It is also considering developing a “classics” channel showing repeats of older series, including those originally broadcast by its main rival. “Obviously TV3’s archive only goes back 14 years, but we would also love to be able to show RTÉ’s archive shows,” Mr McRedmond said.
But while the broadcaster is “ready to go” with TV3+1, it has been frustrated by a lack of visibility on transmission tariffs paid to RTÉNL.
“The problem is there is no regulated tariff for transmission. The Department of Communications has said we can launch new channels, but we don’t have any fixed tariff, so we can’t launch them,” Mr McRedmond said, referring to “the snail’s pace” of market reform in Irish broadcasting.
“The process has been incredibly slow and we can’t do anything except keep asking for a price.”
In the previous accounting year, Tullamore Beta Ltd, TV3’s parent, recorded a profit of €68.5 million as a result of a €81 million exceptional gain which it secured when it refinanced its borrowings from Irish Bank Resolution Corporation, then Anglo Irish Bank, so that this sum only became payable in the event that Doughty Hanson sold the company.
This leaves TV3 with outstanding bank borrowings of €52 million, while the net loss for 2011 takes the company’s accumulated losses to €253 million.
TV3 increased its staff numbers last year to 267, up from 248, as it took on production and online staff. The broadcaster has now begun searching both internally and externally for a replacement for its director of programmes Ben Frow, who has quit the company.
Psychic Readings: TV3 Defends Policy
WITH THREE complaints to the Broadcasting Authority of Ireland upheld against it, TV3’s Psychic Readings Live is certainly controversial, but how lucrative is this “infomercial” for the broadcaster?
TV3 chief executive David McRedmond declines to say, describing that as “commercially sensitive” information.
“That’s a straightforward commercial deal,” he said. “We have three hours of infomercial time and we sell it to whoever offers us the most for that time. After that, it’s just like with advertising spots, we don’t interfere with it.” Psychic Readings Live has been broadcast on TV3 between midnight and 2am since June, while the channel also transmits a further hour of teleshopping in the early morning. “It’s a tough market and we have to monetise our business any way we can,” Mr McRedmond said. “We would love to do everything we can to have higher quality programming, but in the middle of a recession, we don’t have the luxury RTÉ has to run up a deficit.
“If we have to sell infomercial time at midnight rather than 3am, then that’s what we have to do.”