Profile: Michael Finkelstein

Aug 13, 2001  •  Post A Comment

Michael Finkelstein, named CEO of SBS Broadcasting last week, vowed to reduce the company’s single largest expense-programming-to no more than 40 percent of total revenues.
That will raise European TV station margins by 20 percent to 25 percent and generate $20 million in additional cash flow.
Although he has been vice chairman of SBS since 1997, Mr. Finkelstein has not been a hands-on station operator since he sold his Renaissance stations to the Tribune Co. in 1997.
Mr. Finkelstein said SBS spends $200 million a year on programming now and wants to cut that by one-fourth. He said the company just concluded a contract negotiation with a major distributor.
EM: And how much of a reduction did you get with them?
Mr. Finkelstein: It was a package of product. I’m comfortable saying we got in excess of a 10 [percent] to 15 percent reduction.
EM: How much of a threat will News Corp.’s Sky Global be to broadcasters in Europe?
Mr. Finkelstein: It’ll be very successful and take its share of the audience. But it’s less concern to us because of the language barrier. There is no inconsistency between being cost conscious and developing strong stations. We’re not cost-cutters. We just want a reasonable return on our programming.
EM: Is your big challenge trying to do all this in an ad recession?
Mr. Finkelstein: It’s not that the recession is what put these companies under huge pressure because the margins are so high-that shouldn’t happen. What puts these companies under this pressure is the wrong calls they make. So they pay a 20 percent increase for Major [League] Baseball, expecting the audience to be there and it’s not. We built a pretty impressive audience. We’re 49 percent of Hungary. We’re 28 percent of the Netherlands. We’re the leading station in Poland. So we’ve built the audience, and now what we have to do is to gauge the market realistically and price it accordingly, because that’s how the advertisers will price us.
EM: You’re talking of initially cutting costs 10 percent to 15 percent?
Mr. Finkelstein: Yes. We’re consolidating our formats, doing joint productions-that’s what the Fox joint venture is all about.
We rent one island, and we do programs for three or four countries there. We buy these formats for all our markets and get the efficiencies of scale.