UK's Money Channel fights for survival

chris

Financial TV station The Money Channel is in danger of becoming the no-money channel after admitting its revenues are insufficient to cover its working capital requirements. Senior management are attempting to put together a rescue package for the business, which employs 130 people.


But in the showbusiness tradition, amid all the turmoil the show must go on. Although its AIM-listed shares have been suspended and uncertainty surrounds its future, The Money Channel is continuing to broadcast on BSkyB's digital satellite and Telewest's digital cable platforms.


The Money Channel, founded by former pop star Adam Faith who holds a stake of approximately 5 per cent, had £2.6 million (4.2 million euros) in the bank at the last count in February and has been exploring potential strategic alliances for several months. In the six months to the end of September last year the group made a loss before tax of just under £5 million (8 million euros).


Uncertainty about the group's future has reduced its stock price from a 52-week high of 142 pence to just 13 pence before Tuesday's suspension. Now the group's vision of building a financial portal with content that can be accessed over PCs, television and handheld devices lies in tatters.


The channel started broadcasting in February last year at the height of the dotcom boom, competing against financial channels such as CNBC and Bloomberg TV by offering personal finance news as well as stock picks aimed at retail investors. But the tech stock crash saw many retail investors shy away from the markets. Although The Money Channel, which has plush studios in London's East End, had been pulling in an average of 135,000 viewers per week, by late last year it became obvious that basic advertising revenues were not going to be sufficient to support the company.


As a result The Money Channel turned to digital interactive advertising and launched a service in February of this year allowing viewers to request information about financial products from their TVs. The group said earlier this year that its future capital requirements were dependent on the commercial viability of that service.


The Money Channel said in a statement: "In the two months since commencing sales of interactive advertising, the service has received growing levels of acceptance – both from the advertising and consumer communities. However, revenues are currently insufficient for the projected working capital requirements of the company."

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