Haim Saban's Pro7 Zeigt's Allen.

One knew that Haim Saban's new offices, located in the Century City section of Los Angeles, were in an important building, when Senator John Kerry was seen visiting it to raise money for his U.S. presidential campaign. Indeed, the 26-story building exudes wealth and, appropriately, security for the facility is on par with that of the Federal Reserve.

Saban's spacious offices on the top floor of the building are completely different from his old digs two miles west, where he ran Saban Entertainment, a group of production, distribution and cable network companies, which he founded in 1988, five years after immigrating from France, where he ran a music business since 1973--the year in which he moved from Israel.

In 1995, Saban merged his company with Rupert Murdoch's Fox Kids Network and, in 2001, they sold the whole enchilada for $5.3 billion to the Walt Disney Corporation, netting an estimated $2.65 billion each.

Although the old Saban logo is still used, perhaps as a reminder of his early endeavours, it is nowhere to be found in the new space. These offices are austere and colorless, like those of any prestigious investment firm. From there, the 59-year-old Saban, who normally goes to his office in the afternoon, runs Saban Capital Group (SCG), which in turn, owns Saban Entertainment Group (SEG), a private investment firm specializing in media and entertainment. SCG owns and operates a music company, Saban Music Group, while SEG makes both controlling and minority investments in public and private entertainment companies. SEG has investments in Good Times and is looking at cable channel startups around the world.

Haim Saban is SCG's chairman and CEO. President and COO is Adam Chesnoff. Joel Andrye, a 16-year old veteran of Saban Entertainment, is SEG's chief creative officer.

The reason Saban goes to his office in the afternoon is because his mornings are spent dealing with his ProSiebenSat.1 Media investment in Germany, which is nine hours ahead of California.

Asked why the ProSieben group, such a far-away investment and legacy, was attractive to Haim Saban, it was Chesnoff that answered: "It's a fantastic group of assets. It controls 100 percent of their TV stations, contrary to our main competitor, RTL, which has some TV outlets in partnership with other companies."

On his part, Haim Saban commented that, "we're very happy with the recent performance of ProSieben and we continue to feel very good about the future of the investment. Additionally, we are gratified by the warm reception we have received in Germany."

ProSiebenSat.1 now controls 29.5 percent of the German audience and an advertising television market share of 42.9 percent.

The Munich-based ProSiebenSat.1 company is a group of four TV networks that SCG bought from bankrupted KirchMedia in August 2003.

Originally, SCG, through P7S1 Holdings, an offshore subsidiary, and six additional financial partners, acquired for an estimated one billion euro, 36 percent of the share capital of ProSiebenSat.1, representing 72 percent of the voting rights.

Now, KirchMedia is in the process of relinquishing its remaining 14.7 percent in ProSiebenSat.l for an estimated 200 million euro, with 13 percent going to SCG and 1.7 percent going to Alex Springer Verlag, which is increasing its stake in ProbiebenSat.1 from 10.2 percent to 11.9 percent. The new structure will give SCG and its six financial partners, which include Quadrangle Group, 88 percent of voting rights.

ProSiebcnSat.1 AG was formed in 2000 by merging ProSieben Media AG and Sat.1. The group's four terrestrial TV networks--Sat.1, ProSieben, Kabell and news channel N24--has a combined workforce of 2,900 people between Munich and Berlin, and is now publicly listed in Frankfurt's MDAX, a market for medium-sized companies, and traded at about 13 euro per share. The group now owns 48.4 percent of Euvia Media, a company specializing in interactive channels.

Haim Saban goes to Germany eight to 10 times a year, especially for the upfronts in Dusseldorf, where most of the media agencies are located, as well as major advertisers like L'Oreal and Henkel. At the last upfronts, held on July 29, the Group pre-sold 85 percent of its inventory. However, CCO Joel Andryc pointed out that "advertisers can change up to six weeks before broadcasts."

The upfronts continued in Los Angeles, where Saban invited some of Germany's major advertising executives to his home in Beverly Hills to dine with former U.S. President Bill Clinton.

According to the German Advertising Federation (ZAW), in 2003, television advertising generated 3.81 billion euro, a 3.7 percent drop from the previous year. Nonetheless, there were winners like public broadcaster ARD, which increased its ad revenues by 3.2 percent to 141.04 million euro; RTL-2 grew four percent to 223.2 million euro; Super RTL ad revenues increased by 5.6 percent to 91.7 million and Vox was up six percent to 230.4 million.

Among the losers were public broadcaster ZDF, with a 4.2 percent drop to 111.23 million euro; RTL, whose ad revenues dropped 2.3 percent to 1,152.4 million euro; ProSieben, with a 10 percent drop to 700.8 million; Sat. 1, down 2.2 percent to 777.3 million; Kabel 1, down 2.1 percent to 193.7 million. Other networks, such as n-tv reached 26.5 million euro, down 32 percent, and N24 had first year revenues of 18.6 million.

However, according to Guillaume de Posch, ProSiebcnSat.1's CEO, the German advertising market will grow an estimated two percent net for 2004. In the first six months of 2004, the Group's ad revenues were 932 million euro, or 55.2 percent of last year's total revenues. De Posch wants to increase the audience share of ProSieben's 14-49 demos to 29.5 percent. To achieve this, the group will invest approximately one billion euro in programming across the four networks. Programming mix is 50 percent imports and 50 percent domestic. The imports come mainly from the U.S., while Europe is relied on for reality-format concepts. Reportedly, Saban now controls one of the biggest single buyers of American product outside of the U.S. The other is Harry Sloan's SBS, which is said to have invested $1 billion on U.S. output deals at the last L.A. Screenings.

Pro7 is a general-audience network aimed at the 14-49 demos that general manager, Dejan Jocic, programs with movie blockbusters and hip shows. Its new slogan, "We love to entertain you" is in English. The networks major challenge is to counter- program with RTL, the dominant network. Sat.1 is also a general-audience TV network that general manager Roger Schawinski programs for a broader audience in direct competition with RTL. Its slogan for the 2004-05 season is "Sat.1 zeigt's allen" ("Sat.1 shows it all"). Kabel 1, whose general manager is Andrea Bartl, specializes in classic series and movies, while N24 is a news channel with some scheduled documentaries, headed by general manager Torsten Rossmann.

The German audience seems to appreciate big American blockbusters, proven by high theater admissions and the DVD boron, both driven by Hollywood movies.

For Germany, the "American connection" means that some home-grown shows or formats from ProSiebenSat.1 will have wider distribution, including exports to the U.S. television market. In addition, stated Andryc, "Saban has helped the German TV market adapt to the new economic realities of the business and has brought in a fresh approach and a new management team to turn around the performance of ProSiebenSat.1 Media."

As far as the Group's digital TV plans are concerned, Andryc stated that, "Options are still being reviewed and, also, the multiple channel concepts are under review. In any case, no final decision can be made before antitrust authorities review plans of Kabel Deutschland to become the monopolist cable provider in Germany."

Kabel Deutschland is waiting for the German antitrust authority to take over the country's remaining regional cable-TV franchises: Ish (North Rhine-Westphalia), Kabel BW (Baden Wurttemberg) and Iesy (Hessen), reaching a total of 17 million subscribers.

However, said Andryc, "Interactivity will definitely become another revenue source. Diversification of revenue streams and the positioning of the Group for the digital future belongs to the long-term strategic goals of the ProSiebenSat.1 Group."

And what about the future? SCG's president, Adam Chesnoff, would not comment on ProSiebenSat.1's next step.

In other investment news, The New York Times recently reported that Saban is "toying with the idea of buying The Jerusalem Post from Hollinger International." Israel, where he immigrated in 1956 from his native Egypt, is one of Harm Saban's main interests, besides the U.S. and business.

Not afraid of controversy, Saban also expressed an interest in buying the U.K.'s ITV, while accusing the BBC of pro-Arab coverage.