RTL writes down Five by E337m

Gerhard Zeiler CEO of RTL Group said it would allow the government to retain a majority stake in any merger with Channel 4, as he wrote down the value of the UK channel by E337m slashing its value by half. Zeiler stressed he is committed to the UK and said a merger between Five and Channel 4 has “industrial logic”.

Zeiler was speaking at the announcement of annual profits for RTL Group plunged to €194m from €563m, mainly due to the writedown of Five by €337m. It now values the business on its balance sheet at €252m.

The Five group of channels saw revenues decrease 13.4% to €432m last year, as a result of the plunge in the value of the pound against the euro. In local currency, revenues before financial charges were flat at £341m. Five’s profits dropped from €35m in 2007 to €16m last year, while its digital channels saw losses reduce from €25m in 2007 to €14m last year.

“The UK is incredibly difficult, probably the most challenging of all the Western European countries besides Spain,” he said. “If I can quote Michael Grade, I think there is an intelligent debate to be had in the current environment… about consolidation.”

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