MFE Shows Signs of Recovery in European TV Ad Market

Dan Meier 23 November, 2023 

MediaForEurope (MFE), the European broadcasting group, has witnessed a 2.1 percent YoY fall in revenues during the first nine months of 2023, according to earnings posted this morning. A tough TV ad market continues to weigh on the broadcaster’s books, yielding a 1.1 percent YoY fall in advertising revenues.

But the group struck a positive note in terms of its overall stability, sending operating costs down 2.1 percent over the nine-month period. MFE said the savings stemmed from synergies created by the takeover of Mediaset España, in the wake of their merger at the start of the year.

Nevertheless, the broadcaster noted that “the advertising market in Italy and Spain continued to be relatively weak.” Spanish TV revenues were down 2.3 percent YoY for the first nine months, although much of the downturn was concentrated in the first half of the year, followed by “gradual improvement”  during the third quarter.

The Italian business had a stronger showing, according to MFE, with TV revenues falling just 0.8 percent YoY. Again, Mediaset Italia’s performance during the second half of the year appears to be making up lost ground. In an interview earlier this month, Publitalia CEO Stefano Sala said Italian ad revenues actually grew 8 percent YoY in October, with a similar rise expected in November.

There was less cause for celebration in the German market, where the group holds a 28.9 percent stake in ProSiebenSat.1. MFE said the expenses related to its investment amid high inflation, as well as the “ongoing mediocre performance of advertising revenues in Germany,” had impacted the company’s profit margin. Group profits totalled €71 million for the first nine months, representing a 9.6 percent YoY drop.

Balancing the books

Yet the group remained upbeat on its outlook for the rest of the year. MFE expects an “increased momentum of advertising revenues in the final quarter,” anticipating the usual lift in ad investment for the festive period. The broadcaster also flagged broader volatility in the European economic climate, particularly around the new Spanish government creating political uncertainty in the country.

Regardless, the group said “the market outlook in Italy and Spain still remains better than in other major countries.” And its earnings for the rest of the year should be favourable compared to the final months of 2022, the company predicted, as MFE did not hold broadcasting rights for the World Cup in Qatar last year.

“Thanks to MFE’s growing international presence, the group’s financial performance exceeded expectations, despite facing challenges such as the complex global geopolitical climate, the ECB’s ongoing policy of rate rises, the impact of inflation, and varying advertising trends in the individual countries of operation,” said the company.

Despite its slight contraction, the Berlusconi-owned business was keen to stress that it has outperformed other European broadcasters so far this year. MFE’s ad revenues for the first nine months of 2023 (-1.1 percent YoY) compare favourably to advertising declines at European rival RTL (-8.5 percent) and UK broadcaster ITV (-7 percent).

But both broadcasters showed similar signs of recovery in the most recent quarter, suggesting improvement in the European ad market during the second half of the year. The French TV market appears to be gaining stability based on TF1’s most recent filing. The commercial broadcaster reported that ad revenues were down 1.6 percent over the nine-month period, but climbed 7 percent in the third quarter.

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