A first report was issued by the investigation services of the Competition Authority and it is not “not favorable” to the proposed merger between TF1 and M6, which is to create a French television giant, announced Tuesday July 26 the leader of M6, Nicolas de Tavernost, on the sidelines of the publication of the results of his group.
The report points in particular “significant competition concerns” in television advertising, mentioned Mr. de Tavernost. “The nature and extent of the remedies required in the investigation report would make the project irrelevant to the parties who, in this case, would abandon it”then declared together TF1, M6 and their respective shareholders – the Bouygues and RTL groups – in several press releases.
These measures “would not make it possible to build a coherent industrial project”, insisted Mr. de Tavernost, proposed as future CEO of the new group. The two channels are counting on this merger to weigh against new digital players, such as Netflix, which are eating away at the viewing time of traditional television, raising the price of audiovisual programs and are now investing in the advertising market.
Final decision expected in October
TF1 and M6 ask the Autorité de la concurrence to consider their market share taking into account these new global players. Both groups originally hoped “synergies” estimated at between 250 and 350 million euros. The channels, however, hear “maintain the project as it was presented” and respond to the institution within three weeks, said the chairman of the management board of M6.
The parties concerned will be heard by the college of the Competition Authority on September 5 and 6, said in press releases the Bouygues groups, the largest shareholder of TF1, and RTL, which owns M6. The final decision expected in October will be up to this college, which is not required to follow the advice of the investigation services.
A merger of TF1 and M6 would create a French giant in the market for audiovisual rights, channel distribution and television advertising, with around 75% of French turnover in the latter sector. Announced in May 2021, this project is supposed to be finalized in early 2023, after having also received the agreement of Arcom (ex-CSA), scheduled for November.
Latest mixed results for the M6 group
The two groups have already begun to put themselves in order to allow their merger. In particular, they announced the sale of the TFX and 6ter channels to the Altice group and the release of the TNT frequency of Paris Première to comply with regulations on media concentration. TF1 has for its part withdrawn from a certain number of activities linked to marketing and the online press.
The M6 group presented mixed results for the first half on Tuesday. Its turnover, at 664 million euros, rose by 3% over one year thanks in particular to the resumption of the cinema activity, commented Mr. de Tavernost. But advertising revenue, stable from January to June with 530 million euros, presents less encouraging prospects for the second half of the year.
This is partly explained by the absence of sporting events during the summer compared to the previous year, when M6 broadcast eight Euro 2020 football matches, and by the economic context which leads advertisers to some “waiting”, said the leader. The increase in expenses linked to the merger project and the decrease in an audiovisual tax credit also weighed on the group’s net profit, which fell in the first half by 22.4%, to 92.5 million euros. euros.
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