EM.Sport Revalues Entertainment Unit

ISMANING, January 23: EM.Sport Media has extended the sale
process for EM.Entertainment after not having found a suitable buyer since
putting the division on the market last May, and has lowered the price tag from
90 million euros to 40 million euros.

Last May, the German company, then known as EM.TV, announced
plans to offload its children’s and youth business—consisting of
EM.Entertainment and Junior.TV—in order to focus solely on its more
profitable sports activities.

The company said today that it will “extend substantially”
the divestment process because of the “longer than expected sustained weakness
in demand for license products and new productions within the children’s and
youth entertainment sector, as well as the general current financial crisis.
Both of these factors have had a negative impact on the number of offers, on
the value of offers and the refinancing options available to those investors
participating in negotiations.”

The revaluation of the segment from 90 million euros to 40
million euros, meanwhile, is based on “fair market valuation from a buyer
perspective against the backdrop of reduced earnings expectations.”

EM.Sport says EM.Entertainment has underperformed, with new
projects at the end of 2007 not having done as well as expected. Until further
notice, the entertainment division businesses will continue under the
management of Werner E. Klatten, the CEO of EM.Sport Media. Susanne Schosser,
the managing director of EM.Entertainment and Junior.TV, has been asked to
stand down from her position with immediate effect.

Klatten said in a statement: “The current upheaval on the
financial and capital markets have significantly impacted conditions for
M&A transactions. This factor, in combination with the lower than expected
financial performance of the Entertainment division, has led to a substantial
weakening in the prospects for achieving commensurate divestment revenue, at
this time. In this regard, it is in the best interests of shareholders to extend
the divestment process. This has no impact on our strategic decision to
concentrate our efforts on the profitable Sports division. We must look at this
revaluation as a one-off effect in relation to our successful core Sports
business. In recent years, it has proven to be an engine for growth and
sustained profitability.”

—By Mansha Daswani