Red Arrow sale could enable ProSiebenSat.1 to ‘double down’ on German market

ProSiebenSat.1’s strategic review and potential sale of production outfit Red Arrow is an expression of the company’s focus on “doubling down on the German footprint” and building an intellectual property portfolio that reflects that, according to CEO Max Conze.

“it is important to have more German production,” Conze told MIPCOM attendees. “We are actively looking at other partnerships.”

He said that Red Arrow, with its strength in the US market, is “just not as synergistic to that footprint”, so it make sense to look at partnerships or a buyer with a more international reach for the company.

Conze cited Studio71, the group’s digital production arm, as an example of a production activity that more closely reflected the company’s strategic focus.

“We are doubling down on building and owning more IP in Germany,” he said.

Regarding the outcome of the review, he said the group would have “a pretty clear answer of where this train is going” by Christmas.

Conze also said that a sale of Red Arrow could provide a cash injection that would help finance another pillar of ProSiebenSat.1’s strategy – expansion of its ecommerce arm.

Conze said that ProSiebenSat.1 had plans to grow NuCom, the ecommerce division it has created to house its assets spanning matchmaking/dating, consumer advice, experiences and beauty and lifestyle, and it could make sense to use cash from the sale of Red Arrow to finance that expansion.

He said he had always worked in businesses that were consumer facing, where technology and marketing play significant roles, and that combining ecommerce and entertainment makes sense.

“Viewing is declining. We need to make that business future proof, but there is sense in putting these two things together,” he said, citing examples in Asia such as China’s Alibaba.

Conze said that Europeans “probably think in a more delineated way” than the likes of Alibaba, which services Chinese consumers across a range of activities.

He said that the company would “likely” buy more ecommerce businesses in the future.

Conze said that while TV advertising is declining, ecommerce is growing, which had enabled ProSiebenSat.1 to turn in 4% growth in Q2.