Survival of the Biggest: Europe’s TV Shake-Up Is “Inevitable”

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This past week, two significant TV transactions have caught attention – ITV Studios purchasing a substantial share in Moonage Pictures, producer of the film ‘The Gentlemen’, and MediaForEurope’s proposed acquisition of Pro7Sat.1, a German broadcasting station. These deals underscore a stark reality for Europe’s traditional broadcasters: Survive or perish.

In an attempt to stay afloat amidst the growing competition from worldwide streaming services, Europe’s long-standing TV heavyweights are working hard to increase their size and strength. These global streaming giants have been steadily eroding their viewership and decreasing their profitability. Previously invincible regional titans now find themselves in a precarious position.

Last year, ProSiebenSat.1, a broadcasting company based in Munich, reported operating profits exceeding $600 million (€557 million), with revenues slightly increasing to over $4.2 billion (€3.9 billion). However, television advertising revenue saw a decline for the third consecutive year, dropping approximately 5 percent to $1.6 billion (€1.47 billion). Given this context, when MediaForEurope (MFE), the European broadcasting group primarily owned by Italy’s Berlusconi family, made a takeover bid for the remaining roughly 70 percent of ProSiebenSat.1 it doesn’t already own, the offer was considered quite low. The valuation of the broadcaster’s stock at around $1.4 billion (€1.3 billion) was the minimum price permitted under German law.

According to market analyst François Godard from Enders Analysis in London, the bid for Pro7 won’t be successful as it stands currently. Instead, he suggests that Media-Sat-Stern (MFE), the potential buyer, might choose to wait until Pro7 disposes of some of its non-essential assets, such as e-commerce and online dating ventures, before making a full acquisition. Godard predicts that MFE will eventually gain control over Pro7, as consolidation within the European media landscape is expected to happen inevitably.

According to Pier Silvio Berlusconi, CEO of MediaForEurope (MFE), their strategy is to acquire television networks throughout Europe to gain an advantage in the advertising market through economies of scale. By growing large enough, they aim to challenge competitors like Netflix, Amazon, and YouTube for ad revenue in Europe.

MediaForEurope (MFE) currently owns Italy’s largest television broadcaster, Mediaset, as well as Spain’s top commercial network, Telecinco. If MFE were to acquire Pro7, it would rank third among Europe’s commercial TV companies, trailing only behind RTL, which is owned by the German media conglomerate Bertelsmann, and ITV from the United Kingdom.

Based on news outlets’ accounts, Media Fortress Enterprises (MFE) has submitted a proposal for TVN, the free-to-air broadcaster in Poland that Warner Bros. Discovery is looking to sell. Reuters indicates that MFE has organized €3.4 billion euros ($3.6 billion) in financing to fund its growth strategies, and it’s speculated that TV properties in Portugal and the Netherlands are potential targets as well.

Since 2019, MFE has been adopting a cross-border approach due to the expectation that single-country consolidation, specifically merging the leading and second commercial networks in a specific region, would face opposition from national regulatory bodies. RTL has made two such attempts, proposing in 2021 a $4 billion merger between its French network M6 and market leader TF1, as well as a similar deal in the Netherlands linking up RTL Nederland with Talpa Networks, a TV group managed by TV producer John de Mol, known for creating ‘The Voice’. However, both proposals were thwarted by antitrust authorities.

In a contrasting approach, RTL and ITV are channeling their earnings from traditional free TV, which despite a gradual decline, remains profitable as stated by Godard, towards expanding their in-house streaming platforms (RTL+ and ITVX) and content production business. The British conglomerate, ITV, has been actively acquiring numerous boutique companies such as Moonage Pictures, Hartswood Films (known for Sherlock), Eagle Eye Drama (creators of Professor T.), and Nicola Shindler’s Quay Street Productions.

Via its production division Fremantle, RTL has been on a spree of acquisitions, swallowing up esteemed independent production companies such as Ireland’s Element Pictures (known for “Poor Things” and “Normal People”), Italy’s Lux Vide (“Devils”), and the U.K.’s Dancing Ledge Productions (“The Responder”). Despite postponing its initial aim of reaching €3 billion ($3.24 billion) in annual revenue for Fremantle by the end of this year (it was €2.25 billion last year), RTL is determined to grow rapidly and significantly.

Reports indicate that ITV is in preliminary discussions with the investment group RedBird IMI, which is backed by Abu Dhabi, about merging ITV Studios with All3Media, a production company owned by RedBird and known for creating global sensation “Traitors”. If this deal goes through, it would result in a massive $4 billion production powerhouse. Additionally, there are rumors that Fremantle could potentially make an offer to acquire ITV Studios as well.

During ITV’s earnings conference call on March 6, CEO Carolyn McCall chose not to address rumors about potential mergers. However, she emphasized a point of consensus within the broadcasting industry: The trend points towards further consolidations in the future.

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2025-04-02 19:55