TV Bids – The Financial Consequences

TVS could have to accept six years of losses if, as rumoured, it has bid £55m for its franchise, according to a report from stockbrokers Gilbert Eliot.

TVS could lose £20m in 1993, in contrast to low bidders Central and STV, whose combined operating profits of £61m would account for 70% of C3’s total profits.

TSW, believed to have bid around £16m, would not make a profit until the next century, according to the report.

This year, despite the current economic climate, the network’s total operating profit is expected to be over £120m. In the first year of the new franchises, the report estimates that the combined operating profits for C3 will fall to £73m, the bulk of which will come from Central and STV.

The figures are based on an expected growth in the economy of around 2.5% a year over the ten year franchise period, with C3 advertising growing at 2.1%.

Total profits over the ten years are predicted to rise to £766.26m by 2003.

TVS is expected to confirm the size of its bid tomorrow (3/8/91).

Gilbert Eliot: 071 628 6782