CTC Media expects sublicensing revenue to fall by half due to Ukrainian crisis
ST. PETERSBURG. May 24 (Interfax) - CTC Media is forecasting that its revenues from sublicensing will tumble by half in 2014 compared to last year because of the crisis in Ukraine, which has impacted revenue from the sale of content to Ukrainian partners.
"This money [from content sales to Ukrainian partners] is a significant part of revenue. This segment accounted for 2% of our total revenue last year. This year this percentage was targeted higher, but in reality we think that in the conservative scenario it will amount to 1% of revenue," CTC Media CEO Yuliana Slascheva told Interfax on the sidelines of the St. Petersburg International Economic Forum.
"Consequently, revenue from sublicensing could fall by more than half. However, we continue consider Ukraine as an extremely important market for us, so we will fight for this market with all our might. I expect that the tension should ease after the [May 25 presidential] elections," Slascheva said.
She also said that the company has already collected the debts of Ukrainian partners for past periods. In June, CTC Media plans to begin "intensive negotiations" with them on new contracts, their terms and prices.
"On one hand we will take a tough position on payments, on the other understanding the difficult situation that they are in, and they are suffering huge losses - all of Ukraine's television holdings are losing tens of millions of dollars. Therefore we will reach an agreement, continue to supply content," Slascheva said.
She said the company will offer instalment plans for a number of products, "but demand strict fulfilment of the conditions of agreements."
"Of course, we won't grant three-year extensions, but within the bounds of a year we are prepared to concede to instalments. And we will be flexible on the price," Slascheva said.
She also said that CTC is thinking about a production partnership with Ukrainian companies. "They're interested in us, we in them. The political conflict should not affect our business, we shouldn't lose contact with this market," Slascheva said.
