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Chinese Company Said Eyeing Media Giant CME

Time Warner-owned company dominates TV market across a wide swathe of Central and Eastern Europe.

24 November 2017

Reports of a possible change in ownership at one of the region’s biggest media players are sparking comment on how it would affect both its hugely profitable private TV stations and the broader media space.

 

Several sources told Reuters that a consortium headed by Chinese energy and investment group CEFC wants to buy Central European Media Enterprises (CME) from Time Warner, the news wire reported Wednesday.

 

The Czech-Slovak financial group Penta is privately-held CEFC’s partner in the proposed deal, sources familiar with the matter told Reuters. One of the sources said the deal to acquire Time Warner’s shares could be worth around 500 million euros ($590 million).

 

Josef Husbauer of Slavia Prague celebrates a goal during a recent derby against arch-rivals Sparta. Screen shot of Czech Television coverage via YouTube.

 

CME owns broadcasters in six countries in the region, with its Czech and Romanian assets driving overall profits, Reuters says.

 

Another source said the Czech investment group PPF was potentially interested in buying CME.

 

Slovakia’s Sme newspaper earlier this month suggested that Time Warner was asking 2 billion euros for CME and said Penta, PPF, and other Czech and Slovak investors could come together to make a bid for the group, the Slovak Spectator reported.

 

“What impact the sale of CME will have on media and journalism in the region will depend on the buyer. It's better if such a big group is bought by a company with media know-how that has shown interest in bankrolling independent journalism,” Marius Dragomir, the director of Central European University’s Center for Media, Data, and Society, told TOL.

 

“If it's an investor without media experience, it could be problematic because such buyers usually see media as an instrument to pursue their business interests,” Dragomir added.

 

Both Sme and Broadband TV News said Time Warner prefers to sell CME as a whole rather than in individual pieces.

 

Reuters notes that the proposed $85 billion merger of Time Warner and AT&T could affect a deal for CME.  The U.S. Department of Justice is suing AT&T, arguing the merger would lead to higher prices and less consumer choice.

 

CME agreed to sell its Croatian and Slovenian TV stations last summer but Croatian regulators declined to approve the sale of the country’s Nova TV this week on competition grounds, Broadband TV reports.

 

 

  • CEFC is already active in the region. Last spring it took a majority stake in Romania’s largest oil refinery. It has several assets in the Czech Republic including the Slavia Prague football club, and the European Central Bank has given it permission to raise its stake in Slovakia’s J&T Finance Group from 5 to 50 percent, according to the Slovak Spectator.

 

  • Penta, which has both print and online media investments in the Czech Republic and Slovakia, might have to divest some of its Slovak media assets in order to acquire some or all of CME.

 

  • CME’s Czech flagship station TV Nova, Markiza in Slovakia, and Pro TV in Romania are the most-watched private stations in their respective markets.

 

Compiled by Ky Krauthamer
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