A report from investment analysts at Berenberg Bank, which studied sectoral impact, and, in particular, on media, stated that while there are some broadcasters that have business interests in Russia, their exposure (to specific losses) are modest.
The bank, according to a report by Advanced Television, said its own portfolio coverage has very limited exposure to Russia and Ukraine, noting: “Unlike some sectors, our media universe has very few business interests in Russia and Ukraine. The (European) domestic broadcasters (ITV, ProSiebenSat.1, Mediaset España Comunicación, MediaForEurope, Atresmedia) and classified entities (Auto Trader, Rightmove and Scout24) do no business in these countries and even the global agencies (WPP, Publicis) have extremely limited exposure to them – less than 1 per cent.”
“Broadcasters are the most operationally geared of the group, with high levels of fixed cost. Given the shift to in-house production, they have become more adept at trimming costs than they were in the past, but a short-term shock to demand is very difficult to absorb, given the advance nature of planning a programming schedule,” the report quoted Berenberg as saying.
“The conflict creates other issues for broadcasters too. Programming that had been planned may now need to be shelved if it is perceived as being inappropriate (for example, content relating to warfare). If the content is deemed unusable, it will need to be written off as programming costs (and replaced with more appropriate programming, so there is extra cost here),” the bank added.
The bank further analysed that as with peers, Electronics Art (EA) has halted the sales of content, games and virtual currency in Russia and Belarus, while the conflict continues. It has also removed Russian teams from its FIFA and NHL games. “We do not think any of these actions will have a material impact on the P&L,” Berenberg added.