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ProSiebenSat.1 looking to restructure as ad sales fall short

ProSiebenSat.1German broadcaster ProSiebenSat.1 Group has warned that TV advertising revenues for the current quarter are likely to come in under previous estimates, and is looking at restructuring its business, including combining its German broadcast and digital arms, and could seek investment partners or to spin off its production and commerce activities.

The broadcaster said it had started a review to align its internal structure  to the changes taking palce in the media landscape and to maximise shareholder value. One possibility being looked at is a combination of its German-language broadcasting activity with its digital entertainment segment. This would be expected to realize “meaningful cost synergies”, the group said.

ProSiebenSat.1 said it could look at options for its production and commerce units including discussion with third parties about co-investing or combining businesses. It said it was also mulling potential future public listings for these units.

Despite the ad revenue shortfall the group maintained it can still meet its overall revenue target.

The broadcaster said it now expected Q3 revenues for its German-speaking broadcasting unit to decline by a mid-single digit percentage compared with last year.

ProSiebenSat.1 said that despite a promising start to the quarter, early feedback regarding sales for September – the most important month in the quarter – indicated that its expected improvement in performance was unlikely to be realised.

The broadcaster said that it still expects overall revenues to increase by a mid-single digit percentage thanks to strong distribution, production and digital activities.

ProSiebenSat.1 said it anticipated an improvement in the advertising in the fourth quarter, but that overall it now expected the German TV ad market this year to about level with last year.