Market Insight

Scripps Networks Interactive to become the majority shareholder in Polish TV operator TVN

March 16, 2015


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US-based media group, Scripps Interactive Networks, has agreed to buy a controlling interest in Poland's TVN. The deal will give Scripps a 52.7% stake in the broadcaster, previously owned by ITI and Canal Plus Group, and will cost Scripps €584 million in cash and the assumption of €840 million of debt.

The deal is subject to regulatory approval and mandates Scripps to submit a public tender offer to further increase its ownership. TVN is a successful media firm in Poland; operating 11 free-to-air and pay TV channels, and an online on demand service.

TVN is also one of Poland’s leading ad-sales houses, generating revenues from its own branded channels as well as from other Polish networks and is in direct competition with state owned Telewizja Polska and Cyfrowy Polsat for a bigger slice of the advertising pie. According to Scripps, after the acquisition its international revenues will account for a quarter of total group revenues. In 2012, Scripps reported revenues of $2.6 billion from its Lifestyle Media segment.

Our Analysis

In 2011 Scripps invested alongside BBC Worldwide in UKTV, acquiring Virgin Media’s 50% share. Currently it operates Fine Living, Food Network and Travel Channel outside the North American region. Scripps is looking to establish a solid presence in a key Central European market, increasing the number of channels available in non-U.S portfolio to 14 and use TVN as a platform to expand its own brands. Both groups share a similar demographic audience.

On the other hand, Vivendi owned Canal Plus Group is shifting away from free television to focus more on its pay TV business in the country. TVN has slowly made the transition from being a public broadcast network to a having a number of thematic and pay channels and more recently launching its own OTT service, TVN Player.

Broadband penetration in Poland is still low at 55.3% compared to Western Europe although it grew by 9% between 2013 and 2014 and this is a key element that Scripps is looking to exploit. Also, TVN produces the majority of its content (in partnership with NC Plus) and has a focus on generating revenues from advertising much like Scripps does in the US. Scripps is optimistic about the state of Polish economy and the potential for growth in the media industry. According to IHS Advertising Intelligence, TVN advertising revenues grew by 2.2% from 2013 to 2014 reach $389 million. Total advertising revenues for Poland reached $4.68 billion in 2014 (3.2% yearly growth), making it the third largest market in Central and Eastern Europe after Russia and Turkey. 

Organization
Scripps TVN TVN Group
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