ProSiebenSat.1 states drop of fourth-quarter profit

ProSiebenSat.1 Media AG reported fourth-quarter profit fell on higher costs following its takeover of SBS Broadcasting Group.

Photo: ProSiebenSat.1 states drop of fourth-quarter profit

Net income dropped to 39.5 million euros from 113.4 million euros a year earlier, ProSiebenSat.1 said in a statement on its Web site today. Sales rose 51 percent to 987.3 million euros as the company bought SBS Broadcasting to become Europe 's second- biggest broadcaster.

ProSiebenSat.1completed the purchase of SBS Broadcasting in July. The deal valued SBS at 3.3 billion euros and increased ProSiebenSat.1's interest payments as it borrowed money for the takeover.

"The SBS acquisition internationalized the group and clearly reduced our dependency on single markets,'' Chief Executive Officer Guillaume de Posch said in the statement.

The company also said it will buy back as much as 1 percent of its preferred shares, equaling 0.5 percent of ProSiebensat.1's total share capital. The buyback will start March 7 and is mainly linked to a stock option program, the company said.

ProSiebenSat.1 Media AG is a media conglomerate, which owns the popular German broadcasting stations ProSieben, Sat.1, Kabel 1, N24, and 9Live. Until recently it also owned sonnenklar TV, which was sold to BigXtra in September 2005.

ProSiebenSat.1 programs had low ratings because of inconvincing marketing efforts. So ProSiebenSat.1 was bought by the American media tycoon Haim Saban for approximately $700 million. After Saban lost interest in the company because the programs could not compete with Bertelsmann's channels RTL, Vox, and Super RTL, he started an auction to sell the company. Possible bidders were Axel Springer AG, Dogan Group of Turkey, Permira/Kohlberg Kravis Roberts and some others like Goldman Sachs/APEX. The Axel Springer AG's bid was rejected by a federal competition commission, "Bundeskartellamt", because of the influence of Springer in Germany 's media who owns already the nations most selling tabloid BILD and the newspaper Die Welt.

 On December 14, 2006, Germany's Handelsblatt reported that the winner of the bid was the consortium of Permira/KKR. A possible bidder for the company was Silvio Berlusconi, owner of Mediaset and former Italian prime minister. On June 27, 2007, ProSieben bought SBS Broadcasting for the total sum of €3.3 billion. SBS was also owned by Permira/KKR.

The headquarters is located in Unterföhring, a suburb of Munich in Bavaria .