SBC Warburg casts doubtful eye on ITI, CME venture
"CME is one of the most undervalued European TV stocks," says a 48-page report by SBC Warburg released last month detailing the company's media holdings and plans in Central and Eastern Europe as well as in Germany. "Moving into the fast growing economies of Central and Eastern Europe, we expect its new stations to emulate the success of majority-owned Nova TV in the Czech Republic."
CME reaches 27 million people in Germany and Central and Eastern Europe and expects to raise the number to 35 million by the end of the year. The company has the potential to reach more than 100 million viewers if its current bids for licenses in Poland and Hungary are successful and operations are launched in Ukraine, the report says.
CME is believed to be a strong contender for pending regional and national TV licenses in Poland. The company teamed up with International Trading and Investments (ITI), forming TVN Sp. z o.o. in December to bid for several frequencies. Over the next few years the two firms plan to invest a total of $44.7 million into TVN. (See WBJ Dec. 15, 1995.)
However, SBC Warburg is doubtful about CME's potential in Poland.
"In this crowded market we do not expect CME and ITI to make a major impact," the report says. "Western and local programming is plentiful and cable is booming ... The potential 30%-40% coverage for TVN is a little too limited to make it a major player."
The report notes that TVN will not have the budget to compete with large companies that already have agreements with U.S. and European studios as well as sports broadcast rights. "TVN will simply not have the budget to compete on equal terms with these players, especially given CME's funding obligations to its other operations," the report says.
Jan Wejchert, ITI's president and chief executive officer, declined to reveal TVN's budget, but said, "I think we are prepared to compete with anybody on the market." He said the programs would primarily be locally produced, which is what viewers requested.
Regardless of CME's future in Poland, SBC Warburg recommends that investors buy the stock: "CME's stock is high risk but is an excellent way to gain exposure to a burgeoning media sector in the fast growing economies of Central and Eastern Europe."
CME was trading on June 5 on NASDAQ at $25.50. SBC Warburg says the stock has excellent growth potential, and sets a price target of $35.
Royal feud continues
The nobles have won the first round of the battle against the commons.
WWT Poznan has taken its Jan III Kowalski, 70-millimeter cigarette off the market while British American Tobacco's trademark suit against the company remains pending. BAT claims that the name is too much like its Jan III Sobieski king-size brand. (See WBJ March 25-31, 1996.)
Jan Kowalski is the Polish equivalent of John Smith, while Jan III Sobieski was a Polish king who vanquished Ottoman troops three centuries ago.
"This kind of cigarette (70 mm) will disappear slowly from the market, so promoting it does not make sense," said Wlodzimierz Targowski, a spokesman for WWT. He said WWT discontinued producing Jan III Kowalski because Germany's Reemtsa, which purchased 33% of the factory, has a "different marketing plan."
Lesson plan
The British & American English School was scheduled to shoot its first television commercial in Warsaw last weekend.
The commercial features a kilt-clad Scotsman lost in a block of flats asking for directions from a nine-year-old student at the school. "Where did you learn to speak English so well?" he asks. "At the British and American English School, of course," is the reply. Zofia Kopestynska, director of studies, said the school opted for TV exposure because of growing competition among private language schools. The spot is scheduled to be shown on cable stations when children go back to school this fall and is targeted at mothers.
Empik's new bookmark
Empik is launching a line of books bearing the book and music retailer's name.
The store recently began selling 10,000 copies of a new edition of Przewodnik po Polsce, a 1,120-page guide to Poland featuring maps and historical and cultural trivia - not to mention a well-placed advertisement for the retailer. The book, which sells for zl. 48.30 ($18), was published by Sport i Turystyka-Muza SA and bears the Empik name and logo.
"The most important benefit is the higher recognition of the chain by customers," said Maciej Dyjas, president of Empik's board. "It is something unique," he said, noting that producing books also raises a retailer's profits.
Dyjas said the book is the first of many for Empik, which has also begun producing records.
CME reaches 27 million people in Germany and Central and Eastern Europe and expects to raise the number to 35 million by the end of the year. The company has the potential to reach more than 100 million viewers if its current bids for licenses in Poland and Hungary are successful and operations are launched in Ukraine, the report says.
CME is believed to be a strong contender for pending regional and national TV licenses in Poland. The company teamed up with International Trading and Investments (ITI), forming TVN Sp. z o.o. in December to bid for several frequencies. Over the next few years the two firms plan to invest a total of $44.7 million into TVN. (See WBJ Dec. 15, 1995.)
However, SBC Warburg is doubtful about CME's potential in Poland.
"In this crowded market we do not expect CME and ITI to make a major impact," the report says. "Western and local programming is plentiful and cable is booming ... The potential 30%-40% coverage for TVN is a little too limited to make it a major player."
The report notes that TVN will not have the budget to compete with large companies that already have agreements with U.S. and European studios as well as sports broadcast rights. "TVN will simply not have the budget to compete on equal terms with these players, especially given CME's funding obligations to its other operations," the report says.
Jan Wejchert, ITI's president and chief executive officer, declined to reveal TVN's budget, but said, "I think we are prepared to compete with anybody on the market." He said the programs would primarily be locally produced, which is what viewers requested.
Regardless of CME's future in Poland, SBC Warburg recommends that investors buy the stock: "CME's stock is high risk but is an excellent way to gain exposure to a burgeoning media sector in the fast growing economies of Central and Eastern Europe."
CME was trading on June 5 on NASDAQ at $25.50. SBC Warburg says the stock has excellent growth potential, and sets a price target of $35.
Royal feud continues
The nobles have won the first round of the battle against the commons.
WWT Poznan has taken its Jan III Kowalski, 70-millimeter cigarette off the market while British American Tobacco's trademark suit against the company remains pending. BAT claims that the name is too much like its Jan III Sobieski king-size brand. (See WBJ March 25-31, 1996.)
Jan Kowalski is the Polish equivalent of John Smith, while Jan III Sobieski was a Polish king who vanquished Ottoman troops three centuries ago.
"This kind of cigarette (70 mm) will disappear slowly from the market, so promoting it does not make sense," said Wlodzimierz Targowski, a spokesman for WWT. He said WWT discontinued producing Jan III Kowalski because Germany's Reemtsa, which purchased 33% of the factory, has a "different marketing plan."
Lesson plan
The British & American English School was scheduled to shoot its first television commercial in Warsaw last weekend.
The commercial features a kilt-clad Scotsman lost in a block of flats asking for directions from a nine-year-old student at the school. "Where did you learn to speak English so well?" he asks. "At the British and American English School, of course," is the reply. Zofia Kopestynska, director of studies, said the school opted for TV exposure because of growing competition among private language schools. The spot is scheduled to be shown on cable stations when children go back to school this fall and is targeted at mothers.
Empik's new bookmark
Empik is launching a line of books bearing the book and music retailer's name.
The store recently began selling 10,000 copies of a new edition of Przewodnik po Polsce, a 1,120-page guide to Poland featuring maps and historical and cultural trivia - not to mention a well-placed advertisement for the retailer. The book, which sells for zl. 48.30 ($18), was published by Sport i Turystyka-Muza SA and bears the Empik name and logo.
"The most important benefit is the higher recognition of the chain by customers," said Maciej Dyjas, president of Empik's board. "It is something unique," he said, noting that producing books also raises a retailer's profits.
Dyjas said the book is the first of many for Empik, which has also begun producing records.
