Speaking with investors via a conference call, CME (www.cetv-net.com) president and COO Adrian Sarbu predicted the decline would continue for "the next few quarters." Sarbu noted that for the CME territories, the recent economic crisis is the first they had experienced in the 20 years since gaining independence from the Soviet bloc. CME management declined to make any forecasts for the near future, except to note that the bottom of the market was still to come.

Numbers across the board were disappointing, even though, Sarbu said, "We anticipated this in December and took strong actions to minimize its impact on our business. Since January the macroeconomic indicators for all our countries have deteriorated week by week. TV ad spending in our core markets fell between 10% and 30% in quarter one. All the actions we took on the revenue and cost side could not offset the magnitude of this decline."

The Ukraine was CME's poorest performer, with a 356% decline in EBITDA, at a loss of €12.3 millon. Slovenia, at EBITDA of €3 million (an 18% decline) and Croatia, which just barely climbed out of the red (a 98% increase) were the best performers.

Nevertheless, there were some bright spots for the optimists. Market share for all stations increased during the quarter. Internet growth was strong, most notably in the Czech Republic, where it was up by 740%. And a €181 million investment in CME by Time Warner (www.timewarner.com) bolstered the company's liquidity. The investment in effect allows CME to avoid short term cost cuts that would be damaging in the long run.

One such cut was exemplified by CME's Slovak station, Markiza TV. Cuts in programming costs, typified by "post-poned programming investment" led to a decline in prime time audience share to a weak 33% showing. Management were unified on the point of maintaining investment in programming despite dwindling advertising income.

For the CME press release, go to FNE's Press Release section.