Canwest, which manages TV3 and has a 45 per cent stake in it, is buying the film distribution unit of the Dutch television production company, Endemol Entertainment NV, for about $100 million (£67 million). The agreement includes the production firm's library, which holds about 600 hours of television programming, and the distribution rights. The Endemol unit's assets and operations will be absorbed by Fireworks International, the London-based television distribution arm of CanWest Entertainment. The company is a subsidiary of Canwest Global Communications which controls the board of TV3 and carries out the day-today management. The station now has 20 per cent of the State's television advertising revenue and expects TV3 to break even in its third year of operation. The station will celebrate its third birthday in September 2001.
It has indicated its interest in getting at least one of the licences to operate regional radio services that may be offered by the Independent Radio and television Commission. Currently, quarterly losses are down from $3.8 million Canadian (£1.7 million) to Can$1.2 million (£0.54 million) and turnover has increased by more than 50 per cent in the same period. Canwest also has a 29.9 per cent stake in UTV. Mr Blake Tohana, chief financial officer of CanWest Entertainment, said the real advantage for TV3 was that Fireworks International was based in London. "Our sales guys in London can get over to TV3 and meet with them in 45 minutes," he said.
The chief executive of CanWest Entertainment, Mr Jay Firestone, said the number of television stations in Europe was increasing and there was more demand for product internationally. "It's still growing at a fantastic rate," he said. Endemol, which pioneered the Big Brother reality-based television show, is in the process of being purchased by Spanish telecoms group Telefonica TEF.MC in a deal worth US$4.5 billion. CanWest, which also has radio and television properties in Australia and New Zealand, said the acquisition would double the size of its programme library. In addition, the Canadian company will have first rights to acquire all available distribution rights to future television programmes produced by Endemol Entertainment for the next year. "The concentration of our company is on content library and Endemol has been buying a lot of movies and mini-series, which is an area we have been trying to build in," Mr Firestone said.
Earlier this month, Canwest reported operating profits of Can$93.9 million for its third quarter - the three months to May 31st - which included a 53 per cent per cent growth in turnover at TV3 Ireland, from Can$4.8 million (£2.2 million) to Can$7.4 million (£3.3 million).
Canwest has stated in regard to TV3 that "break-even of this successful start-up is expected in the third year of operation". In the second quarter, TV3 had a turnover of Can$6.3 million (£2.8 million) and made a loss of Can$2.3 million (£1.04 million).
