Deadline: ProSiebenSat.1 Sees Earnings Nosedive 49% As TV Ad Market Continues To Falter

Story from Deadline:

Soon after announcing plans to cut 400 roles, European giant ProSiebenSat.1 Media has seen profits plunge 49% and revenues fall.

The Germany-based broadcaster reported second quarter adjusted EBITDA of €79M, compared with the €155M posted in the same segment last year. Adjusted net income (which excludes capital structure and tax arrangements) was even worse, falling from €64M in 2022 to just €4M, down nearly 94%. Without the adjustment, ProSieben recorded a €56M loss.

Revenues were down 17%, from €1.04B to €868M. 4-Europe’s big media groups are feeling the same pinch as their U.S. counterparts, with ad-reliant commercial TV networks among the worst hit. ProSieben, which is the middle of a redundancy process aimed at reshaping the company into a digital-first operation, blamed its Q2 results on “continuing economic weakness” in the German-speaking region, effects of consolidation and the ad market.

“The TV advertising business in particular continued to be affected by ongoing consumer restraint in the second quarter, albeit to a somewhat lesser extent than in the first quarter,” said ProSieben, as it positioned the results as in line with expectations.

The group is expecting some light in the second quarter of the year, with “an improved economic development” providing “corresponding positive effects” for the German-speaking TV ad market (Germany, Austria, Switzerland) in comparison with last year.

Like its commercial TV kin, ProSieben is also pushing heavily into digital, primarily through its streamer Joyn. It posted digital and smart advertising revenues up 5%.

ProSieben’s entertainment division, which houses its channels and production business, posted external revenues down 21% to €592M. Besides the ad market dips, ProSieben noted the U.S. arm of Red Arrow Studios had last year added €75M in the second quarter — cash that no longer comes in following the sale of the unit to Peter Chernin’s North Road.

“As expected, the second quarter continued to be characterized by a weak TV advertising market,” said ProSiebenSat.1 Media CEO Berrt Habets. “This once again underlines how crucial it is that we focus on our digital business at ProSiebenSat.1. We are clearly aligning our organization and processes to our digital transformation.

“We are already seeing the first positive results here with our streaming platform Joyn: The launch in Austria was successful, advertising revenues on the platform are growing and video view time increased by 6% to 6.5 billion minutes watched in the second quarter. We are consistently pursuing this path, combined with our strong focus on costs and efficiency. With the organizational and strategic realignment now initiated, we are creating the basis for consistently implementing our growth strategy.”