LONDON Regardless of whether the U.S. passes the $700 billion bailout the second time around, the impact of chronically tightening financial markets and nearly 12 months of economic jitters are already blowing cold winds over Europe's biggest broadcasters.
"I'm operating on the assumption that the world as we know it isn't going to end and that the bailout program will be passed," said one European media analyst based in London.
"But the impact will be widely felt and comes on top of a tough year. Commercial broadcasters and especially those who are mostly reliant on advertising are in for a very rough ride," he added.
Even before the impact of the multiple bank failures of the past month cycles through the economy, free-to-air channels are showing the strain of nearly a year of financial unease -- slashing program budgets and issuing profit warnings amid a confetti of pink slips.
This week, Britain's ITV announced that, by the end of February, it will cut 1,000 jobs, almost a fifth of its work force.
COO John Cresswell said the cuts are the latest cycle of "efficiency" savings intended to protect ITV's annual $1.75 billion program spend.
Last week, Germany's ProSieben issued a profit warning, with the private equity-backed venture now believed to be worth just 20 percent of what KKR and Permira paid for it three years ago.
KKR and Permira are reportedly looking to cut $140 million from the budget, and ProSieben is still without a replacement for CEO Guillaume de Posch, who steps down at the end of the year. "No one seems willing to take on what looks like a suicide mission," a German insider said.
RTL Group, Europe's largest commercial broadcaster, has been cautiously optimistic about the German market, saying it sees no signs of an advertising downturn. In fact, RTL boasted double-digit revenue and operating profit growth in Germany in the first half. But that hasn't helped the company's share price, which is down 45 percent for the year.
In France, private network TF1 recently invested $185 million to restructure its content and production activities amid talk of a possible sale, but its shares have lost half their worth compared to the same period a year ago.
Not everyone is depressed, though. In fact, the very slough of despond that the industry is lurching through has some potential buyers excited.
"There are going to be very good buying opportunities in the next six months," said one London-based private equity executive with investments in broadcast companies across the continent. "Buyers will borrow less and will pay less, but the deals are very good if properly picked."
Mimi Turner reported from London; Scott Roxborough reported from Cologne, Germany.