The president and CEO of Central European Media Enterprises (CME), Adrian Sarbu, has resigned after nearly two decades at the company to set up a content business that CME plans to invest in.
In a filing with the Securities and Exchange Commission yesterday, CME said that Sarbu intends to develop the content business next year and, subject to prior board approval, CME will acquire an equity stake of up to US$3 million in that as-yet-unnamed firm.
Sarbu will set up the company to produce new content after the January 1 termination date of his employment with CME. Though Sarbu’s resignation is effective immediately, CME said he will continue to be employed until that date to ensure “an orderly transition.”
During this period Sarbu will continue to receive his current salary and benefits and after January 1 will receive severance pay of US$5.4 million. He also has the right of first negotiation in the event CME elects to sell off its entire interest in any Group Company owned by them up until December 31, 2015.
The CME board has tasked board member Duco Sickinghe with leading a committee of directors to “ensure a smooth business transition” while the committee looks for a permanent replacement for Sarbu.
“The board strongly supports the strategies undertaken by CME during 2013, including important initiatives like the increases in television advertising prices and carriage fees, which are expected to produce the most value from CME’s primary businesses, and result in strong performance from the company,” said CME in a statement.
Sarbu started out as CME’s partner when CME launched Pro TV in Romania in 1995. He subsequently served as chief operating officer of the Company from 2007 to 2009. Since 2009 he has been president and CEO.
His departure from follows a string of poor results. In the three months ending June 30 CME reported a 14.7% year-on-year drop in revenues and swung to a net loss of US$41 million.
Commenting on his departure, Sarbu said: “I am proud to have been a part of CME for nearly 20 years and to have ensured the continued success of the Company through this very challenging period. It is an outstanding organisation with talented employees. I am confident the company is well positioned for the future. My mission at CME is accomplished.”
Ronald Lauder, CME’s founder and chairman of the CME board of directors thanked Sarbu for his contribution to the firm and said: “Adrian drove the implementation of CME’s multichannel strategy and new media initiatives. And he has worked diligently and successfully as CEO to maintain the Company’s market leading positions in difficult macroeconomic conditions and a transitional period in the industry. We are grateful for Adrian’s leadership throughout and look forward to continuing to work with him in the future.”