Advanced Medien, VCL Film + Medien, and FAME are the latest publicly listed German media companies forced by the 'unfavourable market environment" in the German media sector to embark on a radical strategic reorientation of their operations.
Beleaguered producer-distributor Advanced Medien, whose share price has hovered just above oblivion for several months, has announced a set of "aggressive measures (') to restructure and streamline the company".
These include the decision by the Munich-based company to focus from January 1, 2002 on its core business of license trading and thus wind up its theatrical distribution arm Advanced Filmverleih with immediate dismissal of executive board member Veronika Morawetz.
According to an official communique, Advanced's theatrical arm, which had functioned as little more than a PR agency this year, had "experienced a strong decline in its business activities during the past months", and "the company does not expect this situation to improve in the foreseeable future".
Advanced's last theatrical release this year will be Austrian director Florian Flicker's 2000 Bronze Leopard-winner Der Ueberfall on November 15. The other current release - Terry Zwigoff's Ghost World - has attracted just under 10,000 admissions so far.
The communique indicated that the billing and booking arrangements Advanced has in place with the German office of UIP and Filmwelt will not be affected by the dissolution of Advanced Filmverleih, but the new year will tell if these partner companies are prepared to continue the collaboration under the new circumstances. (At the moment, Filmwelt is supposed to be handling Colleen Murphy's Desire, Kathryn Bigelow's The Weight Of Water, Elie Chouraqui's Harrison's Flowers, Santosh Sivan's The Terrorist and Sara Sugarman's Very Annie-Mary on behalf of Advanced).
Meanwhile, VCL Film + Medien has posted losses of Euro 26.8m in the first nine months of the 2000/2001 financial year in spite of its net sales rising year-on-year by 121% from Euro 37.5m to Euro 82.9m.
The losses were caused as result of "extraordinary effects" totalling Euros 42.2m affecting the library assets of the VCL Group and the assets of the company's Danish subsidiary Scanbox Entertainment. In addition, the adoption of the new US-GAAP accounting procedures has also resulted in a negative effect on profits.
In the light of "the more difficult conditions" in the rights trading sector and VCL's restructuring of its licensing business, the company's board has reduced its sales forecast for 2001 from Euros 151.8m to around Euros 100m (including Scanbox).
Commenting on its efforts to solve its financial problems, VCL noted that "discussions with strategic investors are still continuing and have been underlined by a further Letter of Intent" and that its liquidity bottleneck has now been reduced to "around Euros 4m".
The adverse market situation in Germany has also been cited as the reason for F.A.M.E. drastically lowering its sales and earnings forecasts for 2001.
Sales are now expected to total $10.5m (DM 23m) instead of the initially forecast $18.3m (DM 40m) while earnings before interest and taxes (EBIT) will pan out at minus $1.4m-$1.8m (minus DM 3-4m) instead of the previous $503,000 (DM 1.1m).