Wednesday 21 February 2018

UPC's business and media expertise good news for TV3

The potential purchase of TV3 by UPC will bring a new dynamic to the world of Irish television

Bob Hughes

News that TV3 is to be sold - subject to regulatory and ministerial approval - to platform provider UPC, sees another seismic shift in the turbulent world of Irish television.

For the station, it should mean a new injection of energy following a sales process that has been a long time coming. For the viewer, it is to be hoped that there will be a renewed impetus for home-produced programming.

TV3's venture-capitalist owners, Doughty Hanson, bought the station at the height of the boom for €265m in 2007. They had hoped to turn a profit and sell the station in three years, but the recession has something to say about that. This week's sale price of €80m sees a considerable slump in value, despite the recent slight improvement in the advertising market.

Prior to the arrival of UTV Ireland, TV3's focus was on competing with RTE, but if two was proving difficult company in a recession, three was certainly going to be a crowd. UTV Ireland's debut and consequent share in the market has taken some of the shine off their rivals' opportunity to capitalise on the recovery.

UTV gave itself a foothold in the south by snatching Coronation Street, Emmerdale and other important ITV properties away from TV3. TV3 responded by reinvesting its savings on the ITV contract in home-produced programming, not least the costly but highly-rated soap, Red Rock.

But Red Rock's output was slight in comparison with the weight of the UK soaps, and TV3's other home-produced initiatives did not rate well enough to maintain overall ratings for the channel - even though some losses were offset by an improved performance by the youth-oriented channel 3e.

The notion that TV3 was awash with cash to spend as a result of giving up the might of Coronation Street was wrong, and Doughty Hanson went on record to state that it had no interest in investing any more funding on top of what it had already committed.

As a consequence, Red Rock has taken a summer break, and home production has been slowed down in favour of TV3's Rugby World Cup coverage, a high-profile but high-cost acquisition, which nevertheless shows the station can still play with the big boys.

Without UTV Ireland's presence creating three major TV players, both TV3 and RTE could have looked forward to sharing the spoils of a rebounding ad market, despite the added challenges provided by digital competitors and external channels offering bespoke Irish advertising.

Fortunately for Ballymount and Montrose, it could have been worse. UTV Ireland has had an inauspicious start, recording figures below expectations and having to revise its forecast losses - twice.

Initially, year one losses were estimated at just over €4m, but this week, a second upward revision put them at €16.2m. UTV Ireland now faces a serious challenge to chase ratings, and its ambition to become the second-watched channel in the south by 2017 seems increasingly unrealistic.

RTE - like a sleeping lion in the corner of the room - will have one eye firmly open, watching developments intently.

The third major player in the Irish TV market was not a welcome addition. The director general of RTE, Noel Curran, acknowledged as much when he appeared before the Dail Joint Committee on Transport and Communications last autumn, although he deflected the challenge by saying he would be more concerned about UTV if he were the CEO of TV3.

With UPC entering the fray by acquiring TV3, there will be a new dynamic. UPC is part of Liberty Global, headed up by the United States' biggest landowner, billionaire John Malone.

Malone is a very shrewd cookie with a burgeoning passion for his family's Irish roots. He has recently acquired a number of Irish hotels, country houses and a stud farm along with UPC. The purchase of TV3 would seem small change for a man who has also spent millions on philanthropy, including more than $42m dollars in funding for research at Colorado State University in one donation just this year.

Yet, he did not gain success by being an easy touch, and it's indicative that there is a contingency in the purchase price of TV3 for an additional €7m on the station reaching certain targets.

Nevertheless, the business acumen and media expertise that Liberty Global will bring to TV3 will be very good news for the station, with the added synergy of a major platform-provider hitching its wagon to a significant content provider.

Viewers will be hoping that TV3's commitment to Irish programming will receive a much-needed fillip from its ambitious new investor.

Bob Hughes is owner and director of RTH Media and former deputy director of news at TV3


Sunday Independent

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