When the monopoly becomes a trap

Regional TV St.Galler Tagblatt AG (SGT) wants to broaden the ownership of its 100 percent subsidiary Tele Ostschweiz (TVO) by the middle of the year in order to refute allegations of a monopoly. A complete sale is also not ruled out.

Regional TV St.Galler Tagblatt AG (SGT) wants to broaden the ownership of its wholly-owned subsidiary Tele Ostschweiz (TVO) by the middle of the year in order to refute allegations of a monopoly. We have no specific ideas about the future form of the sponsorship," says SGT CEO Hans-Peter Klauser when asked. The sale of TVO shares or the incorporation of TVO into a foundation as with Tele Basel is conceivable. "Depending on the situation, however, we will also sell the entire station if this serves the cause more," says Klauser. "Our main goal is to preserve our child for Eastern Switzerland, which we have raised with investments of between 10 to 15 million francs." There are no potential buyers in sight yet, but Klauser says they will be on the lookout for "media-independent investors" who are based in eastern Switzerland and want to keep TVO alive. It was primarily non-financial reasons that gave the impetus for the planned expansion of the sponsorship, the CEO emphasizes. He estimates that TVO still needs to invest around five million Swiss francs, and he makes no secret of the fact that the SGT Group is also experiencing declining advertising revenues, which makes cost-cutting measures necessary everywhere. "But we are not on our last legs," says Klauser, adding that the SGT is perfectly capable of continuing to support TVO.
Fit for fee-splittingThe primary aim of the search for partners is to make TVO fit for the upcoming fee-splitting. According to the draft RTVG, TV stations with the greatest possible independence from other media companies would be preferred from 2005. "If we don't change our sponsorship, the authorities are more likely to grant Tele Top a fee-splitting licence one day, but our chances would be zero," says Klauser. This would endanger the continued existence of TVO. A broader sponsorship of TVO "should defuse the monopoly accusations against the media house in eastern Switzerland," Klauser writes in the communiqué.
In fact, the SGT Group's own media power (print, radio, TV) has already become a problem twice: With the argument of "strengthening media diversity in St.Gallen", the authorities allowed TVO's competitor Tele Top to expand its broadcasting area to St.Gallen, but conversely TVO itself was prohibited from broadcasting to the entire canton of Thurgau.
Regions not yet definedIn an initial statement, Bernhard Bürki, spokesman for the Federal Office of Communications, described the broadening of TVO's sponsorship as "an element which we welcome". Nevertheless, he said, it was no guarantee that TVO would one day also be entitled to charge fees. The fact is, however, that TVO can keep its viewers interested for about twice as long as Tele Top (see also WW 3/03). So won't a TVO with a broader sponsorship and such a good audience automatically start from pole position one day? Bürki explained that it was too early to make such predictions: neither had the new splitting regulation been approved by parliament, nor had the splitting regions been determined and put out to tender by the Federal Council. What is certain, however, is that the usage figures will not be the most important award criterion (see box).
But how will the other TV operators in eastern Switzerland react? Does the new question of TVO bring the often vainly discussed topic of "cooperation" back onto the table - a topic on which the opponents had never been able to reach agreement until now? The differences regarding quality, budget, concept, broadcasting area, ownership and co-determination were too great. The only thing that is certain is that initial informal talks have already taken place. Norbert Neininger, delegate to the board of directors of Schaffhauser Fernsehen (SHTV), is sticking to his own TV, and Hanspeter Lebrument, head of Tele Südostschweiz, is satisfied with his current broadcast area, which extends to the cantons of Glarus, Graubünden and Schwyz. "We certainly won't be tempted to react now," Lebrument said. And top boss Günter Heuberger let it be known only and rather monosyllabically that he would "certainly examine any proposals from TVO".
But what does TVO itself think about cooperation plans? According to SGT CEO Klauser, the focus is on a new attempt at cooperation. In the event that investor interest in TVO is small, he still wants to keep this option open, he says.
Is currently on the lookout for partners: Tele Ostschweiz.

TVO wants to participate in the fee-splitting according to the RTVG draft with a new sponsorship.
Although TVO was able to increase its revenues (primarily from regional advertising) by 50 percent to 1.4 million Swiss francs last year, last year's deficit was 2.9 million Swiss francs, according to Hans-Peter Klauser, but still 600,000 Swiss francs less than in 2001. For 2003, Klauser expects a further minus of two million Swiss francs. The announced cost-cutting measures have already been taken into account: TVO will cut a total of seven jobs and cancel the reportage program "Zoom".
Schaffhauser Fernsehen (SHTV) shows a deficit of about 200000 francs for 2002. This figure is also "realistic" for 2003, says Norbert Neininger, delegate of the SHTV board of directors. 2001
the loss was still 300,000 francs.
A year ago, Günter Heuberger stated Tele Top's loss in 2001 at CHF 0.5 million. For 2002, however, he only wanted to talk about
a "six-digit deficit once again". Tele Top had more income, but also higher expenses, which is again budgeted for 2003. However, no job cuts are planned (mk).

This is what the draft RTVA says
In its message on the RTVA, the Federal Council first states that there is "too high a number" of TV providers in Switzerland today.
For this reason, in future he wants to license "no more than ten to a maximum of twelve television broadcasters with a licence fee component", and in addition, per
area, only one broadcaster will receive such a licence. According to
Art. 55, Section 2 RTVA, the following selection criteria apply: The licence is awarded to the broadcaster who is best able to meet the legal requirements.
performance mandate. This has top priority. If there are equal applicants, the one who is least dependent on other service providers will be selected. (mk)
Markus Knöpfli

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