AT&T Time Warner deal would mean new owner for Czech TV Nova

24-10-2016

What has been described as the biggest proposed global acquisition this year - the bid by US telecoms giant AT&T for Time Warner – has a Czech angle with the deal set to give its new owner control of the biggest Czech commercial television group centred on flagship broadcaster TV Nova.

Photo: CTKPhoto: CTK AT&T announced the deal – estimated to be worth around 85 billion dollars just before the weekend. And it’s already stirring up a political storm in the US. This is how AT&T CEO Randall Stephenson described the move:

“Today we announced an agreement for AT&T - the global leader in media and entertainment – with terrific businesses like HBO, Warner Bros, and Turner. The media and communications industries are converging – and when it comes down to it premium content always wins. It’s been true of the big screen, the tv screen, and now it’s proving to be true on the mobile screen.”

With its digital phone lines and millions of subscribers to paid-for movie, sports, and other services, the grab for top quality content, such as Game of Thrones maker HBO, means the deal has a pretty clear logic in the US. But it’s already come under fire for threatening to give AT&T a dominant position in the media market which could allow it to squeeze its competitors.

The Czech angle to the massive deal stems from the fact that Time Warner is already the biggest shareholder in Central European Media Enterprises (CME). CME was created by US perfumes millionaire Ronald Lauder with Czech TV Nova its first venture into the Central European media landscape in 1994.

CME quickly expanded to cover six Central European and Balkan countries, though with TV Nova remaining its flagship operation and its main cash cow. But the expansion also brought a lot of debt and Time Warner has gradually increased its stake in CME to now total 47 percent of the voting rights. With Time Warner also underwriting further loans to CME, that financing already expressed in non-voting shares could easily boost future voting shares in the Central European media empire as well.

Photo: Jiří SuchomelPhoto: Jiří Suchomel The US competition worries about this deal focus on the fact that one massive telecom company could discriminate against its rivals on the burgeoning digital entertainment market.

In the Czech Republic, while TV Nova has gone down the paid for avenue with subscription sports and film archive and other material, traditional terrestrial television is still its bread and butter market. And while TV Nova buys its share of blockbuster US films and serials, it has over recent years relied on prolonging the life of its traditional locally made Czech hits like the hospital series Ordinace v růžové zahradě or pub-based serial Ulice to keep its local audience share in the high 40-percent range.

HBO exists in its own right as a paid for film channel in the Czech Republic, ironically though in many cases it has been public broadcaster Czech Television rather than its commercial rival, TV Nova, which has often won the first Czech tv rights to HBO’s worldwide hits. The Czech Republic’s big three telecoms companies have branched out into digital entertainment but while they have the infrastructure they are still for the most part buying the content.

24-10-2016