In times of crisis, more people turn on the television. Nevertheless, Pro Sieben Sat 1 is doing badly. But the shareholders are angry for another reason.
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It’s not exactly an action show that aired this Wednesday from a Pro Sieben television studio in Unterföhring near Munich. Two women and four men sit at individual tables in front of a red wall and take turns reading out prepared statements. Here, where the quite successful Pro Sieben knowledge magazine “Galileo” is normally recorded, this time the virtual general meeting of Pro Sieben Sat 1 Media SE takes place. It’s about the numbers, the strategy and new shareholders, but the audience rating should be manageable in contrast to “Galileo”. After all, there are no annoying advertising breaks – apart from a colorful trailer for the new corporate strategy.
The news that the new CEO Rainer Beaujean had prepared for the shareholders was not the best. A rapid recovery in the advertising economy, which is suffering badly from the corona crisis, is not expected. “In April and May, we had a 40 percent drop in TV advertising revenue. We don’t see any improvements in June, either,” said Beaujean. The business of Red Arrow Studios will also be affected by production shifts. “Unfortunately, in the crisis, advertisers tend to cut or shift marketing budgets,” said Beaujean. How things will go now is uncertain and will depend on the further course of the Corona crisis.
The television company had already withdrawn the forecast for the year as a whole, but did not make a new one, the dividend was virtually canceled. Now savings are made, investments postponed, and there is short-time work in individual areas.
There was already great unrest before the Annual General Meeting. Major shareholder Mediaset called on Beaujean with unusually harsh words to finally present a growth strategy. The German television group “has tried to survive in recent years without having a strategy for its media business,” said Mediaset CFO Marco Giordani. Deka Investment, the savings banks’ fund company and also a Pro-Sieben-Sat-1 shareholder, even called for the medium-term replacement of Beaujean. He was only the right one in the short term to “concentrate on cost, liquidity and cash flow management”. Deka manager Winfried Mathes said: “In the time that followed, however, a top manager with experience in the industry should definitely manage the company.”
The attacks from Mediaset? “This is chain rattles without a chain”
The statements apparently caused misunderstanding and annoyance within the television company, they are surprising and incomprehensible, can be heard. “This is chain rattling without a chain,” says one of the participants, particularly regarding the attacks by Mediaset. The media company is controlled by the family of the former Italian Prime Minister Silvio Berlusconi and is the largest shareholder with around 24.2 percent. But the Italians hold only 11.7 percent of it directly, the rest via financial instruments. A group of investors around the Czech billionaire Daniel Křetínský, according to the information from Wednesday, meanwhile has a good twelve percent of the shares. The US investment company KKR now controls 4.5 percent, both groups had recently bought.
Beaujean had taken over the management of the TV company only in March after a power struggle and long management quarrels. His predecessor Max Conze had to go as CEO after less than two years. Conzes Vice Conrad Albert also left, he had previously spoken of a “board soap opera” in the SZ interview.
The head of the supervisory board, Werner Brandt, now justified the replacement of the management board. “We now need a culture of togetherness and mutual respect,” he emphasized several times, indirectly criticizing Conze, which he had brought himself over two years ago. Again and again there had been reports in the past about Conze’s less cooperative leadership style and about ongoing arguments on the board. Brandt watched for a long time and then surprisingly replaced Conze with Beaujean in the spring, who had previously been CFO. Apparently he had been planning this for a long time. Because Brandt, himself long CFO at SAP, said on Wednesday that it was already clear when Beaujean was signed in July 2019 that he “could take on more tasks”. Brandt described Beaujean as a long-term solution. The Chairman of the Supervisory Board also announced that Conze received a total of 3.9 million euros when he left, and that his contract, which was still running until 2021, had been paid out.
People tune in during the crisis – but advertisers postpone their bookings
Board spokesman Beaujean once again explained his fundamental change of strategy. In the future, Pro Sieben Sat 1 will again concentrate on the core business of entertainment, in particular on the television business in Germany and Austria. “Growth alone should no longer be our measure. We want long-term profitability,” added Beaujean. The conversion is not easy. Beaujean courted patience and said: “There is no elevator to the destination, we have to take the stairs.” The investments in internet companies that had been built up in the past years would be examined and sold. Beaujean announced on the sidelines of the Annual General Meeting that the online dating platform Parship-Elite is planned to go public in 2022.
Like all other media professionals, one is currently “in a paradoxical situation”, he continued: “While our offers are linear and digital at real heights, advertisers reduce their expenses drastically.” Audiences and viewing times rose significantly in the Corona crisis, while revenues would decrease sharply, but many customers would not completely cancel the line items, but simply postpone them. Beaujean emphasized that television still had the strength to provide topics of conversation all over the country: “More than ever, people are turning to television in search of information and distraction.”
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