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23.2.2012 Official
Journal
of
the
European
Union L
50/21
DECISIONS
COMMISSION DECISION
of 20 April 2011
concerning State aid C 19/09 (ex N 64/09) which Denmark intends to implement regarding the
restructuring of TV2 Danmark A/S
(notified under document C(2011) 2614)
(Only the Danish text is authentic)
(Text with EEA relevance)
(2012/109/EU)
THE EUROPEAN COMMISSION,
(3) On
4
February
2009,
Denmark
notified
to
the
Commission, pursuant to Article 88(3) EC, now
Article 108(3) TFEU, a restructuring plan regarding
Having regard to the Treaty on the Functioning of the European
TV2 Danmark A/S.
Union ( 1 ), and in particular the first subparagraph of
Article 108(2) thereof,
(4) By
letter
dated
2
July
2009,
the
Commission
informed
Denmark that it had decided to initiate the procedure laid
Having regard to the Agreement on the European Economic
down in Article 88(2) EC, now Article 108(2) TFEU, in
Area, and in particular Article 62(1)(a) thereof,
respect of the aid.
Having called on interested parties to submit their comments
pursuant to these provisions (
(5) The
Commission
decision
to
initiate
the
procedure
was

2 ), and having regard to their
comments,
published in the Official Journal of the European Union ( 5 ).
The Commission called on interested parties to submit
their comments.
Whereas:
(6) The
Commission
received
the
following
comments
from
I. PROCEDURE
interested parties.
(1) On
4
August
2008,
the
Commission
notified
Denmark
of its decision not to raise objections to the rescue aid to
— 1.10.2009 TDC A/S and You see
be granted to TV2 Danmark A/S in the form of a credit
facility totalling DKK 1 000 million (hereinafter ‘the
rescue aid decision’) (
— 1.10.2009 Canal Digital Danmark

3 ). That decision found that the
planned aid was compatible with Article 87(3)(c) of the
EC Treaty, now Article 107(3)(c) of the Treaty on the
Functioning of the European Union (TFEU), and, in
— 1.10.2009 MTV Networks
particular, with the rules laid down in the Community
Guidelines on State aid for rescuing and restructuring
— 2.10.2009 Niels Jorgen Langkilde
firms in difficulty ( 4 ) (hereinafter ‘the Guidelines’).
— 2.10.2009 Boxer TV
(2)
Pursuant to the rescue aid decision and the Guidelines,
the Commission had to be provided with a restructuring
plan or a liquidation plan, or proof that the loan had
— 2.10.2009 Discovery Networks Nordic
been reimbursed in full not later than 6 months after
authorisation of the rescue aid measure, i.e. by
4 February 2009 at the latest.
— 2.10.2009 TV2 Danmark (aid beneficiary)
( 1 ) With effect from 1 December 2009, Articles 87 and 88 of the EC
Treaty have become Articles 107 and 108, respectively, of the TFEU.
— 2.10.2009 MTG Viasat (which submitted further
The two sets of provisions are, in substance, identical. For the
annexes by letter of 15 October 2009)
purposes of this Decision, references to Articles 107 and 108 of
the TFEU should be understood as references to Article 87 and 88,
respectively, of the EC Treaty when appropriate.
— 2.10.2009 Danish Cable Television Association
( 2 ) OJ C 207, 2.9.2009, p. 2.
( 3 ) OJ C 9, 14.1.2009, p. 2.
( 4 ) OJ C 244, 1.10.2004, p. 2.
( 5 ) See footnote 2.

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L 50/22
EN
Official Journal of the European Union
23.2.2012
— 2.10.2009 SBS Broadcasting Networks Ltd and
submitted more information by letters registered as
SBS TV A/S
received on 11, 17 and 18 March 2011 and on 6 and
14 April 2011. In its letter of 11 March 2011, Denmark
— 7.10.2009 Telia Stofa A/S
informed the Commission that parts of the restructuring
plan (the ‘TV2 Alene card’, explained further below)
would not be implemented. On 17 and 18 March and
on 6 and 14 April 2011, Denmark provided amended
(7) It
forwarded
them
to
Denmark
on
27
October
2009.
financial data taking this amendment into account.
The late comment by Telia Stofa was forwarded to
Denmark on 30 November 2009. Denmark was given
the opportunity to respond and its comments were
received by two letters dealing with different aspects of
(15) It
should
further
be
noted
that
on
24
March
2009,
Viasat
the third party comments: by letter from the Danish
Broadcasting UK Ltd brought an application for
Government dated 29 January 2010, received via the
annulment of the rescue aid decision before the Court
Permanent Representation and registered as received on
of First Instance of the European Communities (now the
23 February 2010, and by letter dated 29 March 2010
General Court) ( 6 ). Moreover, on 15 May 2009, Viasat
and registered as received on 30 March 2010, with the
Broadcasting UK Ltd requested that the Commission
Annexes to that letter later being registered as received
initiate proceedings under Article 108(2) TFEU with a
on 14 April 2010. On 8 June 2010, the Danish
view to revoking the rescue aid decision ( 7 ). These
Government provided some further information on the
filings concern a different decision and do not prevent
adoption of a new Media Policy Agreement for 2011-
the Commission from taking a view on the restructuring
2014.
plan. However, by order dated 17 May 2010, the
proceedings in the court case were stayed until the
Commission’s adoption of a final decision in the restruc
turing case (
(8) On
9
June
2010,
TV2
Danmark
A/S
submitted
an

8 ).
information memorandum on the sale of the TV2 broad
casting network.
(16) On 14 December 2009, MTG/Viasat submitted a
complaint alleging that Denmark is infringing inter alia
(9) The
Commission
had
a
meeting
with
the
aid
beneficiary
Articles 106 and 102 TFEU by the introduction of user
TV2 Danmark A/S on 8 June 2010. As a follow-up to
charges for TV2.
the meeting, the Commission sent questions on 30 June
2010 to Denmark, to which Denmark submitted answers
on 9 July 2010.
II. THE BENEFICIARY: TV2 DANMARK A/S
(17) TV2
Danmark
A/S
was
incorporated
in
2003
as
a
private
(10) Viasat submitted further information by e-mail of
limited liability company wholly owned by the Danish
26 May 2010 and by letters registered as received on
State. The company took over the activities of the
1 June 2010 and 6 July 2010.
autonomous public institution TV2, which was created
in 1986. Danmark A/S has interests in several different
companies, involving wholly-owned subsidiaries,
associates, joint ventures and minority holdings. TV2
(11) Following
additional
questions
by
the
Commission
on
23
Danmark A/S (hereinafter ‘TV2’) is the parent company
and 28 July 2010, Denmark submitted answers to these
of the TV2 Group and operates the public service
questions on 17 August 2010. The Commission had a
television channel TV2 (below also called the ‘main chan
meeting with Denmark on 14 September 2010, after
nel’).
which Denmark provided further comments in a
submission dated 15 October 2010.
(18) Current
business
model: Historically, the TV2 main
channel was funded by television licence fees and adver
(12) Viasat
submitted
more
information
to
the
Commission
on 22 December 2010 and SBS did so on 7 February
tising revenues. However, although the regional channels
2011.
are still partly funded this way, television licence funding

for the main channel ended in July 2004 and only
financing via advertising revenues remained. These adver
tising revenues are currently the only source of income
(13) On 14 January 2011, the Commission sent a request for
for the main channel, apart from the profits from the
information to Denmark, to which Denmark replied by
commercial channels. TV2 is currently not allowed to
letter of 3 February 2011. Denmark requested a further
charge subscription fees for its main channel.
meeting by letter of 28 January 2011. This meeting took
place on 7 February 2011. Further information was
( 6 ) Case T-114/09 Viasat Broadcasting UK Ltd v Commission of the
submitted on 24 February 2011.
European Communities.
( 7 ) This request deals largely with the question of whether TV2 is a firm
in difficulty and to a far lesser degree with the question of whether it
has used the aid for anticompetitive purposes.
(14) At the request of the Danish authorities, a further
( 8 ) Order of the President of the Fifth Chamber of the General Court of
meeting took place on 4 March 2011. Denmark then
17 May 2010 in Case T-114/09.

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EN
23.2.2012 Official
Journal
of
the
European
Union L
50/23
(19) Public
service
obligations: Section 38a(1) of the Danish
distributors) must give access to the channels mentioned
Broadcasting Act establishes a public service obligation
in the provision (i.e. TV2 and DR) in all their pack
for TV2 and states that ‘the public service programming
ages ( 16 ).
activities shall be provided to the general public in
accordance with the principles referred to in Section
10’. These overall obligations are supplemented by
more detailed descriptions in the public service licence
and addenda thereto.
TV distributors using satellite as a distribution platform
were not obliged to include the TV2 main channel in the
programme packages, but chose to do so, since the
channel is very popular ( 17 ).
(20) The
Commission
accepted
( 9 ), and was upheld on this
point by the General Court
( 10 ), that TV2’s main
channel fulfils a public service obligation. TV 2’s public
service activity accounts for more than […] (*) of its
costs ( 11 ).
(23) Distribution
of
television
in
Denmark: Television in
Denmark is distributed in five different ways, based on
alternative means of receiving the TV signal. These are
distribution by cable (distributors YouSee and Stofa),
SMATV (local cable distribution), distribution via
(21) The
TV2
main
channel
is
further
under
a
public
service
satellite dish (Viasat and Canal Digital), distribution by
obligation to broadcast regional programmes according
broadband (IPTV) and terrestrial distribution. As of
to point 2.5 of the TV2 public service licence ( 12 ). The
1 November 2009, the analogue terrestrial signal was
regional content is produced by TV2 regional stations.
switched off and Danish terrestrial TV signals were digi
The eight regional stations are independent from TV2.
tised. The company Boxer won the tender to act as the
They are governed by Sections 31 et seq. of the Danish
commercial gatekeeper and is responsible for the trans
Broadcasting Act ( 13 ). The eight regional TV 2 stations
mission of subscription-based channels through the
each have a Board of Representatives, the composition
terrestrial network. Currently, the TV2 main channel is
of which reflects a wide variety of aspects of the regional
broadcast ‘Free to air’ (FTA) without any subscription fees
culture and community. TV2 may not sit on these Boards
being charged for its viewing ( 18 ).
of Representatives. The regional operations are entrusted
with public service activities under Sections 31 et seq. of
the Danish Broadcasting Act and their programming
must emphasise regional affiliation. Their activities are
primarily financed by licence fees ( 14 ). TV2 is under an
obligation to transmit these regional programmes in
(24) TV2’s
activities: TV2 is primarily active in broadcasting
‘windows’ in TV2’s normal programme flow ( 15 ). TV2
and in selling TV advertising. It also acquires and sells
has no influence on the chosen TV format, e.g. to
audiovisual rights on international markets (e.g. Euro
ensure coherence with general TV programming on the
2008 or the Olympic Games) which it can broadcast
main channel. Between the national and regional
itself or resell. TV2 operates almost exclusively on the
programmes, TV2 transmits advertisements which are
TV broadcasting market and other media-related markets
directed towards the regional market, and it retains the
in Denmark. The TV2 main channel, along with
revenues from advertising.
Danmarks Radio (a public undertaking which is
exclusively financed by a licence fee and operates two
public service channels), is the biggest TV channel.
(22) Must-carry
obligation: Currently, the main channel is
covered by a ‘must-carry’ obligation pursuant to Section
6 of the Danish Broadcasting Act, according to which
SMATV distributors (including commercial cable
The TV2 main channel currently competes on the TV
advertising market with e.g. Viasat’s channels TV3 and
TV3+. Viasat is owned by the Swedish Modern Times
( 9 ) Commission Decision 2005/217/EC of 19 May 2004 on measures
Group A/S (MTG), which is also active as a distributor
implemented by Denmark for TV2 Danmark.
( 10 ) Case T-309/04, TV2 Danmark v Commission [2008] ECR II-2935,
paragraphs 101 et seq.
( 16 ) See Annex 5 to the notification from Denmark, p. 2, and letter
(*) Data omitted on grounds of confidentiality has been replaced
from Denmark of 3 February 2011, p. 7. SMATV stands for
by […].
Satellite Master Antenna Television, and refers to a system that
( 11 ) Letter from TV2 of 2 October 2009.
uses multiple satellite and broadcast signals to create a single inte
( 12 ) Authorisation of 17 December 2009, submitted as Annex 1 to the
grated cable signal for distribution to a cabling network.
submission by Denmark of 9 September 2009.
( 17 ) ‘Information memorandum on Project MUX’ submitted by
( 13 ) Act No 477 of 6 May 2010.
Denmark, p. 32.
( 14 ) According to the Media Agreement for 2007-2010, the annual
( 18 ) Distributors do not pay a TV channel subscription for TV2 in the
licence fee revenues amounted to DKK 428,4 million in 2010.
cable segment either (see Annex 5 to Denmark’s notification, p. 3).
( 15 ) Letter from Denmark of 29 January 2010, pp. 13 et seq. and
According to that document, distributors only charge distribution
Annex 8 thereto.
costs plus fees to copyright owners.

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L 50/24
EN
Official Journal of the European Union
23.2.2012
in the satellite segment. TV2 also competes for adver
22 June 2009. An appeal against the latter judgment was
tising revenue with SBS A/S, which is owned by the
lodged with the Supreme Court, which upheld the High
German ProSiebenSat. TV2’s pay-TV channels, such as
Court judgment on 18 March 2011. The case followed a
TV2 Zulu and TV2 Charlie, compete with other
previous case dating from 29 November 2000 in which
commercial channels on the wholesale market for
the Danish Competition Council had found that TV2’s
distribution in pay-TV packages.
rebates in 2000 were an abuse of a dominant position.
(25) Commercial
operations: TV2 operates a number of
III. OTHER PENDING LEGAL CASES INVOLVING TV2
non-public-service commercial channels, including TV2
Zulu, TV2 Charlie, TV2 Film and TV2 News. It also
(30) Support
for
the
operations
of
TV2
from
public
funds
owns 50 % of TV2 Sports. TV2 Zulu, TV2 Charlie and
prior to its incorporation and subsequent recapitalisation
TV2 News are financed through subscriptions and adver
was the subject of Commission decisions of 19 May
tising, whereas TV2 Film is exclusively financed through
2004 and of 2 February 2005, respectively ( 22 ). In the
subscriptions.
first decision, the Commission ordered the recovery of
incompatible aid to TV2 of an amount of DKK
628,1 million. Denmark ordered recovery from the aid
beneficiary with interest, and recovered an amount of
(26) As
acknowledged
by
Denmark
( 19 ) and TV2 Danmark
DKK 1 050 million from TV2. The second decision
A/S and its competitor Viasat ( 20 ), operation of the
raised no objections to the recapitalisation, which
main channel is vital for achieving the revenues
consisted of a capital injection of DKK 440 million and
generated by the commercial channels.
a further debt-equity swap of DKK 394 million, in terms
of its compatibility with the common market.
(27) TV2 has been obliged since 2001 to keep the accounts
of its commercial and public service activities separate,
(31) On
22
October
2008,
the
General
Court
annulled
the
see Order No 740 ( 21 ). The accounts are monitored by
Commission’s recovery decision ( 23 ). On 24 September
external auditors.
2009 ( 24 ) the General Court issued an order regarding
the recapitalisation decision, declaring that there was
no need to give a decision, since the recapitalisation
decision — which was based on the recovery decision
(28) Other
business: In addition, TV2 Danmark A/S owns
— was based on premises which no longer existed and
several subsidiaries or is part of a number of TV-related
was therefore deprived of any substance and meaning.
joint ventures in content and radio, and previously also
The Court considered that the two decisions constituted
had a broadcasting transmission network (Broadcast
two aspects of the same legal issue.
Service Denmark (BDS), DTT/Digi-TV, 4M and Fordel
ingsnet) with DR. According to information furnished
by Denmark, Broadcast Service Denmark is the leading
Danish broadcaster provider in relation to the planning,
(32) The
Commission’s
investigation
with
regard
to
the
above
construction, operation and service of transmission
case has been carried out in parallel with this procedure,
networks. The transmission network was jointly owned
and the Commission’s decision in the above case will be
by Danske Radio and TV2 directly or via co-owned part
adopted at the same time as the present Decision.
nerships (Fordelingsnet, 4M, Digi-TV). TV2, however, has
sold its shares in this network as part of its restructuring.
IV. THE RESTRUCTURING PLAN
(29) National antitrust cases concerning TV2: The
1. Context of the original restructuring plan
Commission notes that TV2’s behaviour in the adver
tising market is under investigation by the Danish
(33) As
outlined
in
the
Commission’s
decision
authorising
the
competition authorities. On 21 December 2005, a
rescue aid of DKK 1 000 million during 2008, TV2
decision was taken by the Danish Competition Council
Danmark faced serious liquidity problems as a result of
that TV2 had infringed Article 102 TFEU, and the
heavy investments, in particular in a radio operation,
corresponding national legislative provisions, by using
lower than expected advertising revenues and higher
loyalty-enhancing rebates on the advertising market.
interest charges. These liquidity needs could not be met
This decision was annulled by the Competition Appeals
by securing loans from private creditors (banks).
Tribunal on 1 November 2006, but then upheld on
Following the rescue aid decision, Denmark notified a
appeal to the High Court of Eastern Denmark on
restructuring plan within the six-month limit stipulated
in the Guidelines.
( 19 ) Letter from Denmark of 9 September 2009, pp. 10-11.
( 20 ) Letter from Viasat of 2 October 2009, paragraph 114.
( 22 ) Commission Decision 2005/217/EC (OJ L 85, 23.3.2006, p. 1) and
( 21 ) Order No 740 of 21 August 2001 on keeping separate accounts
case N 313/04 (OJ C 172, 12.7.2005, p. 3).
for Danmark’s Radio’s and TV2’s public service activities and all
( 23 ) Case T-309/04 of 22 October 2008, paragraphs 101 et seq.
other activities, adopted for the implementation of Commission
( 24 ) Case T-12/05, Order of the Court of First Instance of 24 September
Directive 2000/52/EC (OJ L 193, 29.7.2000, p. 75).
2009.

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EN
23.2.2012 Official
Journal
of
the
European
Union L
50/25
(34) The
restructuring
plan
submitted
to
the
Commission
on
According to Denmark, the problems of TV2 result, inter
4 February 2009 followed an agreement among a large
alia, from an increasingly unprofitable public service
majority of Danish political parties on an addendum to
channel ( 28 ) without a sustainable business model and
the Media Policy Agreement for 2007-2010, which was
some losses resulting from unsuccessful investments.
made public on 9 January 2009.
(37) Losses: Due to advertising revenues being lower than
(35) In
its
notification
of
4
February
2009,
Denmark
notified
budgeted, in combination with a series of bad
various restructuring aid measures, because, according to
investments (most notably TV2 Radio), TV2 Danmark
Denmark, the short-term liquidity and indebtedness
A/S realised a significant loss in 2007 (DKK 214 million,
problems identified in the Commission rescue aid
return on equity – 36 %). Furthermore, at the end of
decision still existed. Those problems prompted the
March 2008, the 2008 financial result projection was
qualification of TV2 Danmark A/S as a firm in difficulty
another pre-tax loss of up to DKK […] million, albeit
within the meaning of the Guidelines ( 25 ), which the
that the projection was deemed highly sensitive to adver
Commission, in the opening decision, had no reason to
tising market developments. Likewise, the company made
deviate from and which, according to Denmark, remains
losses in 2009.
valid even after TV2’s having received the rescue aid. This
can be demonstrated by the data mentioned in the
Commission’s decision opening the formal investigation
procedure ( 26 ).
(38) Turnover/market share: TV2’s main channel
experienced a falling market share for years prior to
the rescue aid, and continues to do so. The removal of
TV2’s historical business advantage with the switch-off of
(36) Later
in
the
proceedings,
and
in
particular
as
a
reaction
analogue terrestrial TV and the introduction of DTT
to the third-party comments, Denmark provided another
(digital terrestrial television) has led to more equal
updated PWC study on TV2’s financial situation. The
distribution of opportunities since November 2009.
updated data are summarised in the table below ( 27 ).
The removal of the must-carry obligation (see recital
52 below) is expected to lead to further market share
losses. From 2003 to 2009, the TV2 main channel’s
‘commercial’ market share (21-50 year olds, which is
the commercially most interesting viewer group) had
Development of TV2 Danmark A/S
already declined by 19 % from 56,2 % to 45,6 % ( 29 ).
TV2’s commercial market share is expected to […] %
Key figures
in 2013 ( 30 ).
(million DKK)
2006 2007 2008 2009
Profit before tax 142 –
213 18 –
28
(39) Mounting
debt/cash
flow/interest
charges: As can be
seen from the table, TV2 Danmark A/S’s net interest-
bearing debt steadily increased from DKK 232 million
Turnover 1
980 2
251 2
206 2
029
in 2006 to DKK 622 million in 2008 (prior to the sale
of the network and the repayment of most of the debt,
the net interest-bearing debt was budgeted at DKK […]
Net cash flow 79 –
550 –
73 –
60
million in 2010). The table further demonstrates that
TV2 Danmark A/S had negative cash flows, mounting
debts, increasing interest charges, and a falling net asset
Net interest-bearing
232 564 622 659
value over the period from 31 December 2006 to
debt
31 December 2009.
Net interest charges 10 19 41 31
(40) Best
case/worst
case
analysis: The original restruc
Net asset value 815 598 616 601
turing plan contains a base-case, worst-case and best-
case scenario with sensitivity calculations. It draws
( 25 ) Rescue aid decision, paragraphs 7, 8, 10 and 39.
( 28 ) See the Commission decision of 2 July 2009, paragraph 11, which
( 26 ) See paragraphs 10-15 of the Commission decision of 2 July 2009,
provides the figures on the contribution of TV2’s various activities
based on Annex 3 to the original notification.
and the public service channel’s losses over a period from 2008
( 27 ) Annex 2 to the letter from Denmark of 29 January 2010 providing
(DKK […] million) to 2013 (DKK […] million).
an updated PWC analysis of 21 January 2010. The figures estimated
( 29 ) Annex 1 to Denmark’s submission of 29 January 2010 and TV2’s
at the time for 2009 are updated here using the actual outcomes
submission ‘Status of TV2’s financial position and liquidity’, p. 1.
supplied by TV2 as an annex to a letter from Denmark of 9 July
( 30 ) Comments by TV2 to the European Commission dated 25 August
2010.
2009.

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L 50/26
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Official Journal of the European Union
23.2.2012
upon market forecasts which are exogenous to the
uncertainty as to the outcome of the pending State aid
company (as compiled by PriceWaterhouseCoopers).
case concerning TV2 and, not least, a business model for
The scenarios forecast real GDP growth, and from that
the public service channel which is based on advertising
derive an estimated growth (or decline) in the TV adver
revenue only. The radio operations in particular have
tising market which, in combination with market share
caused significant losses since the start-up in 2007. In
projections, yields TV2 advertisement revenue projec
April 2008, it was decided to close down the radio
tions. In the base case, there is a modest increase in
operations.
GDP ([…] % for 2009 and 2010, […] % for 2011 and
[…] % for 2012). The TV advertising market was forecast
to […] between 2009 and 2012 from DKK […] million
to DKK […] million in that period ([…] %). The worst-
case scenario saw a less positive growth in real GDP (zero
(44) Lack
of
external
funding
from
banks: The restruc
in 2009 and 2010 and a […] % and […] % increase in
turing plan takes into account the doubts TV2’s
2011 and 2012 respectively), and […] in advertising
bankers have about the main channel’s current business
expenditure from DKK […] million in 2009 to DKK
model and about the possible outcome of ongoing legal
[…] million in 2012 ([…] %). The best-case scenario
cases regarding past aid to TV2. The restructuring plan
forecast a slightly higher GDP growth than the base
limits the banks’ risk exposure to the company through
scenario and thus a slight increase in the TV advertising
further reductions of current loans or credit facilities.
market from DKK […] million in 2009 to DKK […]
Denmark has provided evidence that on 22 April
million in 2012 ([…] %). In combination with a
2009, following the publication of the company
projected loss of market share, TV2’s advertisement
accounts, the company’s main bank […] asked to
revenues were projected to […] by […] %, […] % and
reduce its loan and credit facility vis-à-vis the
[…] % for the base, worst-case and best-case scenarios
company ( 35 ).
over the 2009-2012 period, equivalent to […] of […] %,
[…] % and […] %.
(45) TV2 experienced difficulties in mortgaging its premises in
Odense and reported that not only the value of the
(41) TV2’s
advertising
revenues
have
grown
at
a
1,9
%
(geo
buildings, but also the potential mortgage, had
metric) average rate over the period 1999-2009 with a
decreased (
12 % standard deviation (

36 ). In the end, TV2 secured a loan of DKK

31 ). Hence, given the business-
80 million from Nordea bank, which was less than
cycle sensitivity of TV2’s advertising revenues and the
expected. Denmark later provided updated information
general economic outlook at the time of the assessment,
regarding the banks’ lack of interest in providing
the PWC projections for the 2009-2012 period cannot
commercial loans. From this information it can be seen
be rejected as unreasonable.
that none of the banks contacted ([…], […], […] and
[…]) considered TV2 creditworthy. This was due to
expectations regarding the development of the adver
tising market, which is TV2’s only source of income.
(42) The
PWC
report
was
updated
in
September
2009
to
take
TV2’s earning ability was questioned, and pending legal
account of more recent expectations regarding adver
cases were considered a further risk factor ( 37 ).
tising revenues, and provided for a worse scenario than
expected in the base scenario ( 32 ). The TV advertising
market dropped in 2009 by 18,7 % compared with
2008 ( 33 ). TV2’s advertising revenues fell by 4 % in
2008 (DKK 1 667 million to DKK 1 597 million) and a
2. Description of the originally notified restruc
further 24 % in 2009 (DKK 1 597 million to DKK 1 220
turing plan and its amendments
million) ( 34 ).
(46) The restructuring plan as notified for TV2 runs between
4 February 2009 and 31 December 2012. It aimed to
address TV2’s business weaknesses, notably an imbalance
towards short-term debt in the balance sheet and a
(43) Denmark
submits
that
TV2’s
difficulties
are
a
result
of
business model for the public service channel that is
debt caused by large investments in the preceding years,
deemed unsustainable due to its reliance on funding via
cycle-sensitive advertising revenues. The plan had the
following five main components: (i) financial restruc
( 31 ) Comments by TV2 to the European Commission dated 25 August
2009.
turing affecting the balance sheet, (ii) operational restruc
( 32 ) Letter from Denmark of 9 September 2009, Annex 2 — updated
turing, (iii) new financing of the public service channel
PWC report.
TV2 by introducing a new business model, (iv) aid
( 33 ) Letter from Viasat of 26 May 2010, p. 2 with reference in footnote
measures and (v) compensatory measure(s).
2 to the DRRB. The value of the advertising market was DKK
1 903 million in 2009, compared with DKK 2 341 million in
2008. See also the updated PWC report, letter from Denmark of
( 35 ) This has been confirmed by […] in writing in a letter dated
9 September 2009, Annex 2.
24 April 2009.
( 34 ) Comments from TV2 to the European Commission dated
( 36 ) Letter from Denmark of 29 January 2010, Annex 1 ‘Status of TV2’s
25 August 2009 (p. 20) and Annex 1 to the submission of
financial position and liquidity’, point 4.
Denmark of 29 January 2010, ‘Status of TV2’s financial position
( 37 ) Letter from Denmark of 29 January 2010, Annex 1, submission by
and liquidity’, point 5, submitted by TV2.
TV2 ‘Status of TV2’s financial position and liquidity’, point 4.

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EN
23.2.2012 Official
Journal
of
the
European
Union L
50/27
(47) The financial restructuring measures were to consist
around DKK 10-12 (excl. VAT) per household ( 41 ). The
primarily of the following four elements: sale of the 50 %
introduction of user charges from 2012 aims to allow
ownership interest in the broadcast transmission network
sufficient time for households currently equipped with
BSD ( 38 ), mortgaging of the business premises in Odense
MPEG 2 technology equipment capable of receiving
(Kvaegtorvet), which was expected to generate DKK […]
‘free-to-air’ digital terrestrial TV (DR1, DR2 and TV2)
million, postponement and scaling down of planned
to switch to MPEG 4-format equipment. Denmark
capital investments and divestment of minority interests
expects that the introduction of this element of the
held in certain companies active in adjacent media
restructuring plan will restore the long-term viability of
sectors, […], Momondo, […] and […]. Those measures
TV2. TV2 expects an estimated DKK […] million net
were expected to bring proceeds in excess of DKK […]
increase in revenues from the user charges in 2012 ( 42 ).
million, part of which was to be used to reduce short-
term borrowing.
(52) There
will
be
no
legislative
act
forcing
distributors
to
include TV2 in their packages. On the contrary, the
(48) The operational restructuring measures expand on the
existing ‘must-carry’ obligation will be repealed upon
cost-saving measures worth DKK 280 million already
the introduction of the user charges ( 43 ). This follows
initiated in 2008, and include the closing down of East
from the wording of Chapter 6, Section 38a(2) of the
Production and its integration into TV2, the closing
current Danish Broadcasting Act, which states that if the
down or downsizing of TV2’s interest in […] and
Minister of Culture allows TV 2 to charge user fees, the
further cost savings of an amount of DKK 40 million.
must-carry status shall cease to exist. In other words, the
Moreover, TV2 has, after the notification, managed to
must-carry obligation ceases automatically with the intro
introduce further cost savings in a plan adopted on
duction of user charges. It is expected that the TV2 main
30 March 2009, which includes reductions in capital
channel will de facto be distributed by the cable
investments for 2009 by DKK 30 million, as well as
networks and antenna associations in the same way as
further recurrent cost reductions amounting to DKK
today. The package structure might be altered by the
97 million (
distributors, with TV2 replacing an existing pay channel.

39 ).

(53) It
was
originally
anticipated
that
exceptions
would
be
(49) A
new financing measure (the end-user charge) ( 40 ) is
intended to broaden the sources of stable revenue for the
made to the possibility of levying end-user charges and
public service channel TV2. The decision regarding this
that TV2 would not charge end users who did not
was adopted in an agreement of 9 January 2009 between
receive any other pay-TV channel (known as the TV2
the main political parties concerning an amendment to
Alone card system). This would have meant that end
the Media Policy Agreement for 2007-2010.
users who only receive free-to-air (FTA) channels could

still view TV2 free of charge. This possibility, which was
contained in a draft proposal by the Ministry of Culture
of 18 November 2010, will not, however, be imple
mented. TV2 will consequently, as of 2012, charge all
end users who wish to receive TV2 to view the public
(50) Levying
of
subscription
fees: The business model for
service channel. The possibility of charging end-user fees
the main channel is to be rendered sustainable by
requires a change in TV2’s licence conditions, which will
allowing TV2 to introduce end-user charges, i.e.
be carried out by the Ministry of Culture.
subscription fees, to fund the public service channel as
from 1 January 2012. In addition, TV2 will continue to
receive advertising revenues.
(54) The
originally
notified
aid
measures: As originally
notified, three aid measures totalling a maximum of
DKK 1 375 million were envisaged to accompany the
(51) The fees will be charged by the distributors to the end
restructuring. These were:
users. The charge to be paid by the end user will not be
set by the Government, but agreed upon through normal
commercial negotiations between TV2 and the
distributors (i.e. for DTT Boxer). TV2 expects the
monthly price charged by TV2 to the distributor to be
— a DKK 300 million subordinated loan,
( 38 ) TV2’s shares in Digi-TV will not be sold, only the direct partici
( 41 ) Letter from Denmark of 11 March 2011, Annex containing new
pations and shares in Fordelingsnet and 4M. See information
media agreement. The Danish authorities indicate that TV2 is
memorandum by Denmark, ‘Project MUX’.
considering a lower subscription fee than the originally envisaged
( 39 ) These cuts include the cancellation of investment in a new channel
DKK 25. TV2 indicates a monthly charge in the range DKK 10-12.
in 2009/2010. See letter from Denmark of 20 May 2009.
( 42 ) Letter from Demark of 17 March 2011, p. 3. Based on an estimated
( 40 ) Hereinafter also called ‘subscription fee’ or sometimes ‘short user
monthly fee of DKK 12.
fee’.
( 43 ) Notification from Denmark of 4 February 2009, p. 6.

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L 50/28
EN
Official Journal of the European Union
23.2.2012
— the issue of a guarantee for the sale of the broadcast
(58) As
a compensatory measure, TV2 originally undertook
transmission network for an expected sale amount of
not to open new TV broadcasting channels throughout
DKK 475 million, and
the restructuring period, i.e. until 31 December 2012.
Denmark points out that this is a sacrifice by the
company, as new channels would make TV2 less
dependent on advertising revenues. In the digital world,
viewers are more frequently addressed via specialised
— a temporary credit facility of an initial amount of
viewer channels, and TV2 points out that its competitors
DKK 600
million if TV2 is unable to secure
are opening new channels during this period.
external financing.
(59) Regarding
the duration of the restructuring plan,
(55) Denmark
stated
that
interest
rates
and
guarantee
fees
which was notified as being until 31 December 2012,
would be similar to those for healthy firms. These
the Danish authorities submitted that it is in TV2’s
measures were never put into place. Further details can
interest to replace all State aid at an earlier point in
be found in the Commission’s decision opening the
time, thus enabling the restructuring period to end at
formal investigation procedure (
an earlier date if possible ( 48 ).

44 ).
3. Further developments during the restructuring
(56) The
rescue
aid
credit
facility
of
DKK
1
000,
as
authorised
process
by the Commission decision of 4 August 2008, remains
in place.
(60) As
stipulated
in
the
restructuring
plan,
TV2
sold
its
broadcasting network on 30 September 2010 to the
Swedish company Teracom AB, the owner of Boxer.
The sale proceeds for TV2 are approximately DKK
640 million before tax, which has been used to reduce
(57) Denmark
submitted
information
on
the restructuring
TV2’s debt.
costs and offers two different calculation options in
that regard. Firstly, it argues that the restructuring of
TV2 is a financial restructuring in which the costs for
filling the liquidity gap are in fact restructuring costs, i.e.
the costs for ensuring long-term viability. Denmark
(61) TV2
was
also
able
to
mortgage
its
business
premises
in
considers that whatever these costs are, they will have
Odense, but at a lower rate than originally anticipated.
been paid entirely by TV2 itself. The reason for this is
Instead of […] million DKK, it obtained a mortgage of
that Denmark assumes that by the time of the Commis
only DKK 80 million.
sion’s decision, all aid measures will either not have been
implemented, or will have been repaid in full ( 45 ).
Denmark also states that in the special case of the TV2
restructuring, cost savings should also be acceptable as
restructuring costs, since the cost savings are intended
(62) On
4
October
2010,
TV2
repaid
all
its
withdrawals
from
not only to increase competitiveness, but also ensure
the temporary credit facility, which was authorised in the
TV2’s financial viability from a purely commercial
Commission’s rescue aid decision. In total, TV2 had
point of view ( 46 ). In the alternative, a more traditional
drawn DKK 223 million from the rescue aid facility. By
calculation of restructuring costs, in which cost savings
the end of 2008, i.e. during the 6 months of the rescue
are not included, would lead to focus on the one-off
aid period, TV2 had drawn 208 million ( 49 ). In light of
extraordinary costs incurred, which Denmark lists as
the sale of the transmission network, which was more
DKK […] million for transaction costs for the trans
successful than estimated in the restructuring plan,
mission network, the costs associated with the transfer
Denmark sent the following amended figures on TV2’s
to pay-TV (user charges) and legal and consultancy costs
financial situation (based on subscriptions to the main
as well as costs for ending staff contracts ( 47 ).
channel) ( 50 ).
( 44 ) Commission decision of 2 July 2009, paragraph 20.
( 48 ) Notification from Denmark of 4 February 2009, p. 8.
( 45 ) Letter from Denmark of 3 February 2011, p. 2.
( 49 ) Letter from Denmark of 29 January 2010, Annex 1 ‘Status of TV2’s
( 46 ) Denmark thus finds that all the costs listed in the Commission’s
financial position and liquidity’, end of point 3.
letter of 14 January 2010 to be relevant restructuring costs, i.e.
( 50 ) Letter from Denmark of 15 October 2010, later amended by
DKK […] million plus additional costs for the mortgage. The
figures submitted on 17 and 18 March 2011. The forecast for
table in that letter by the Commission corrected a few positions
2011 takes into account that the TV2 Alone card system was
from an earlier submission by Denmark as reproduced in the
given up, which resulted in a lower household penetration rate.
Commission decision opening the formal investigation procedure
The figures also take into account the lower than originally
on 2 July 2009.
forecast end-user charges of DKK 10-12 and higher than
( 47 ) Letter from Denmark of 3 February 2011, p. 6 and Annex 1, which
expected advertising revenues. The figures include the subscription
was later partially amended with regard to the cost of introduction
revenues for the main channel as of 2012 as well as the cost of
of the end-user charges system by letter of 17 March 2011.
transition to pay-TV in 2011.

---

EN
23.2.2012 Official
Journal
of
the
European
Union L
50/29
(million DKK)
Realised
Estimate
Forecast
Forecast
Forecast
2009
2010
2011
2012
2013
Revenues 2
029 2
147 […] […] […]
Costs –
1
910 –
1
974 […] […] […]
EBIT –
2 25 […] […] […]
Profit before tax, continuing activities –
28 42 […] […] […]
Profit before tax, discontinuing activities
1 397 […] […] […]
Profit after tax –
14 353 […] […] […]
Equity end of year 601 952 […] […] […]
Net interest-bearing debt end of year 659 –
84 […] […] […]
(63) On
13
October
2010,
[…]
offered
to
provide
TV2
with
solvency ratio of TV2’s peers is significantly lower than
additional credit facilities worth DKK […] million. This
the solvency ratio that TV2 is expected to have at the
would increase TV2’s long-term facilities at […] from
end of the restructuring period. After the sale of the
[…] million to DKK […] million ( 51 ). The offer is
transmission network, the TV2 solvency ratio is […] %
however subject to the following two conditions:
at the end of 2010. It is projected to reach […] % at the
end of 2011 and […] % at the end of 2012. According
to the latest forecasts submitted by TV2, the net debt
(a) […];
ratio (net interest-bearing debt over EBITDA) should be
approximately […] at the end of 2010, […] at the end of
2011 and […] in 2012. The average (median) net debt
(b) […].
over equity ratio at the end of 2009 is […] ([…]) for a
sample of TV2’s peers ( 54 ).
(64) On
that
basis,
TV2
expects
to
have
financial
facilities
in
the range of around DKK […]-[…] million until the end
of 2012. This consists of DKK […]-[…] million and the
4. Impact of the new financial parameters on the
additional external credit facilities of DKK […]
notified restructuring plan
million ( 52 ).
(67) Denmark
confirmed
that
none
of
the
originally
proposed
three aid measures in the restructuring plan has ever
been put into place, but that Denmark awaited the
(65) Denmark
also
provided
data
on
TV2’s
capital
structure.
Commission’s decision in accordance with the standstill
Due to problems in receiving external financing, in turn
obligation of Article 3 of Regulation (EC) No
due to uncertainty surrounding the pending legal cases
659/1999 ( 55 ). In light of recent developments,
and TV2’s business model which is sensitive to adver
however, only the loan and the credit facility under the
tising revenues, Denmark argued that TV2 should rely
restructuring plan as it currently stands are relevant ( 56 ).
less on debt than on equity. The Commission also
The notified aid measure of a proposed guarantee in
observes discrepancies between the degree of equity
relation to the sale of the broadcasting network has
funding of TV2 compared with its peers.
become irrelevant and inoperable ( 57 ), since the sale has
been carried out successfully without a guarantee in
place ( 58 ). In the meantime, only the temporary credit
(66) More
specifically,
the
capital
structure
can
be
assessed
in
facility is in place.
terms of solvency ratio, i.e. the ratio of book equity to
balance sheet total. PWC (Denmark’s financial
( 54 ) Letter from Denmark of 15 October 2010, Annex I, TV2 restruc
consultancy firm) demonstrates that the average
turing plan, and update by e-mail from Denmark of 6 April 2011.
(median) solvency ratio of TV2’s peers is approximately
( 55 ) Letter from Denmark of 15 October 2010. In particular, no
[…] % ([…] % at the end of 2009) (
guarantee has been issued.

53 ). The average
( 56 ) Letter from Denmark of 3 February 2011.
( 57 ) Letter from Denmark of 15 October 2010, p. 2.
( 51 ) Letter from Denmark of 15 October 2010, pp. 2 et seq.
( 58 ) Denmark had explained in the meeting with the Commission in
( 52 ) Letter from Denmark of 15 October 2010, Annex 1 TV2 restruc
September 2010 and reiterated in the letter of 15 October that TV2
turing plan, end of p. 2.
had no legal claim under the guarantee, and that it was simply a
( 53 ) Letter from Denmark of 9 July 2010, Annex TV2 Financial ques
proposal subject to the Commission’s approval, and did not involve
tions.
state resources since it was not binding on the Danish Government.

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L 50/30
EN
Official Journal of the European Union
23.2.2012
In view of the improved financial position of TV2 after
TV2’s financial position in relation to its competitors.
the sale of the broadcasting network, Denmark stated
However, TV2 acknowledges that capital ratios (like the
that all aid measures can be abolished on the sole
solvency ratio) will become meaningful only when the
condition that the restructuring plan is approved
uncertainties of business model and the legal disputes
(including the possibility of implementing end-user
have been resolved
( 65 ). The Danish Government
charges) and that the Commission adopts a decision in
expressed its intention that TV2 should not be overcapi
the ‘old’ State aid cases that does not involve any
talised and is willing to introduce measures to ensure
additional repayment of State aid to the Danish Govern
that this objective will be achieved once the end-user
ment ( 59 ). In such a scenario, TV2 says it will have
charges are introduced in 2012. The Danish
sufficient financing until 2012, when the subscription
Government, as the owner of TV2, will ensure that
payments on the main channel will be implemented ( 60 ).
once the user charge has been introduced and the
The restructuring plan as such is not withdrawn.
financial situation normalised, TV2 will have a capital
Regarding the rescue aid facility still in place, TV2 is
structure in line with normal market conditions.
currently unable to draw any money from it, because
the conditions (certified liquidity need confirmed by an
expert) are not met ( 61 ).
(70) To
that
end,
Denmark
has
committed
to
instructing
an
independent financial expert at the end of 2012 or early
2013 to conduct an analysis of TV2’s capital structure,
(68) In
the
original
restructuring
plan,
Denmark
had
given
a
comparing it with the capital structure of other relevant
commitment that TV2 would not open any new TV
media companies. If TV2’s capital structure deviates
broadcasting channels. That commitment was later
markedly from the median or average of the relevant
clarified to also cover radio channels, but the Danish
peer group, the Danish Government has made a
authorities take the view that this compensatory
commitment to adjust the capital structure at the
measure should end when all aid measures are
meeting of the General Assembly in April 2013, to
repealed, as they consider this to be the end of the
rectify the situation. If there are substantial reasons not
restructuring period ( 62 ). During the Commission’s inves
to adjust the capital structure, the Danish Government
tigation, the Danish Government decided to put a public
will notify the Commission of an amendment to the
service radio channel out to tender ( 63 ). The objective of
restructuring plan. The Danish Government undertakes
this new radio channel is to establish competition on the
to achieve restructuring of the capital base by dividend
Danish radio market for public service programming
payments to be adopted at the General Assembly in April
which, presently, is dominated by the public broadcaster
2013, and not by increasing TV2’s debt, thereby
DR with an almost 80 % audience share. TV2 originally
expanding the balance sheet.
intended to participate in such a tender, in which a bid
could be submitted only after aid measures had come to
an end. However, during the investigation Denmark
confirmed that TV2 will not participate in this tender,
due to the Commission’s ongoing investigation ( 64 ).
(71) Denmark
has
also
undertaken
to
submit
the
analysis
to
the Commission, along with the Government’s plans for
acting in accordance with the analysis, in good time
before the April 2013 meeting.
(69) TV2 states that as long as legal cases are pending, only
earning ratios are an adequate benchmark for assessing
( 59 ) Letters from Denmark of 28 January 2011 and 15 October 2010.
V. SUMMARY OF THE COMMISSION’S OPENING
The letter of 15 October refers only to the decision of 19 May
DECISION OF 2 JULY 2009
2004.
( 60 ) TV2 restructuring plan, Annex I to the letter of 15 October 2010.
(72) In the decision to initiate the formal investigation, the
TV2 submits that the first two aid measures anticipated in the
restructuring plan are no longer valid because of the sale of the
Commission found that the notified loans and guarantee
transmission network. As to the credit facility, TV2 believes itself to
in the restructuring plan constituted State aid within the
have sufficient financing until 2012 when subscription payments
meaning of Article 87(1) EC, now 107(1) TFEU, and
on the main channel will be implemented. In referring to the credit
examined the compatibility of the restructuring plan
facility of DKK […] million, TV2 at the same time confirms that
under Article 87(3)(c) EC, now 107(3)(c) TFEU, in
none of the aid measures in the restructuring plan have been
conjunction with the Commission’s restructuring Guide
implemented. It is therefore likely that TV2 is referring to the
original rescue aid facility.
lines ( 66 ). The Commission, however, invited comments
( 61 ) For a more detailed description, see N 287/08, paragraphs 13 et
on whether the application of Article 87 of the EC Treaty
seq., in particular paragraph 17.
(107 TFEU) would obstruct the performance of the
( 62 ) E-mail from Denmark of 24 February 2011.
public service broadcasting task entrusted to TV2.
( 63 ) The tender documents are available at: http://www.
bibliotekogmedier.dk/medieomraadet/radio/fm-4/udbud See also
the Commission decision of 24 March 2011 in SA.32019,
( 65 ) Letter from Denmark of 9 July 2010, Annex, TV2 Financial ques
Danish Radio channel FM4.
tions.
( 64 ) E-mail from Denmark of 24 February 2011.
( 66 ) See footnote 4.

---

EN
23.2.2012 Official
Journal
of
the
European
Union L
50/31
(73) The
Commission
raised
doubts
about
the
compatibility
have been reproduced which relate to the operation of
of the notified restructuring plan in the following
the TV2 Alene card system, as this part of the restruc
respects:
turing plan will not be implemented.
— While accepting for the time being that TV2
Danmark A/S was a firm in difficulty within the
TV2 is a firm in difficulty
meaning of the Guidelines, the Commission invited
comments given that competitors of TV 2 had
(75) The
Danish
authorities
claim
that
TV2
is
a
firm
in
pointed out that the cash flow problems were self-
difficulty, as shown by a PWC report ( 69 ), which was
inflicted, easily solved and without bearing on the
later updated ( 70 ). That view was also maintained in
fundamental viability of the company. Competitors
reaction to third-party comments ( 71 ).
also claimed that TV2 was profitable in 2008.
(76) According
to
a
PWC
report
carried
out
shortly
before
the
— In addition, taking into account that a restructuring
restructuring notification, TV2 cannot recover through its
plan must involve the abandonment of activities
own resources or by market financing. Denmark also
which would remain structurally loss-making even
claims that the restructuring plan submitted to the
after restructuring ( 67 ), the Commission questioned
Commission is based on realistic assumptions and scen
whether the measures in the restructuring plan were
arios, while showing that the company’s long-term
able to render TV2 profitable on a stand-alone basis.
viability will be restored. The advertising market has
Nor was the Commission in a position to corroborate
deteriorated, however, relative to the base scenario of
the validity of the general market assumptions
the restructuring plan. The advertising market dropped
underlying the plan (e.g. developments in the adver
by 19 % in the first half of 2009 and TV2’s advertising
tising market, GDP growth, TV2’s maintenance of
revenues fell by 24 % in 2009. The restructuring
audience shares).
measures will be implemented as soon as possible,
except for the introduction of user charges, where oper
ational and technical difficulties require postponement
— Given the economic situation in which the restruc
until 2012. Moreover, in a later submission, Denmark,
turing plan is launched, its long duration was ques
again basing itself on PWC projections, claimed that the
tioned.
forecast had in fact deteriorated since the original restruc
turing plan and that TV2’s EBIT in 2009 was DKK […]
million lower than estimated in the restructuring
— Moreover, since a successful implementation of the
plan ( 72 ). Denmark also points out that, as proven by
financial and operational restructuring measures
statements from various banks, the company is not
included in the restructuring plan by 2010-2011
able to obtain external funds because the banks doubt
could render the introduction of user charges on
the business model for the main channel, are critical of
the TV2 channel unnecessary for ensuring the long-
cyclical advertising revenues as a source of income and
term viability of TV2 Danmark A/S, and because
view the uncertainties stemming from pending legal cases
there was no assessment of the effects of these
as problematic.
charges on competition, the question was raised as
to whether the automatic phasing-in of these charges
by 2012, which has already been decided, is appro
priate.
(77) The
operational
and
financial
restructuring
measures
are
analysed as being the maximum that can be undertaken
without compromising the quality of programming in
— The Commission raised concerns as to whether the
the public service channel TV2. The measures will force
sole compensatory measure of a stand-still on
TV2 to better exploit its assets, thus reducing the aid to
launching new TV channels is proportionate to the
the minimum necessary.
aid, size and relative importance of TV2 Danmark
A/S on the markets on which it is active ( 68 ).
(78) Since the sale of the broadcasting network had proven to
— The Commission raised the issue of whether the aid,
be more successful than anticipated, the Government
beyond the contribution to restructuring costs, could
later gave assurances that all aid measures could be
be used to finance aggressive market behaviour.
repealed and not implemented once the Commission
approved the restructuring plan and the pending State
aid case of 19 May 2004 has been settled without
VI.
higher repayments (
SUMMARY OF THE VIEWS OF THE DANISH

73 ).
AUTHORITIES
( 69 ) Letter from Denmark of 9 September 2009, p. 10, referring to the
(74) It
should
be
noted
that
in
the
following
summary
of
the
notification dated 4 February 2009 and the arguments for the
comments of Denmark and third parties, no comments
rescue aid notification.
( 70 ) Annex II to Denmark’s letter of 9 September 2009.
( 71 ) Letter from Denmark of 29 January 2010.
( 67 ) Guidelines, points 34-36.
( 72 ) Letter from Denmark of 9 September 2009, p. 14.
( 68 ) Guidelines, points 38-40.
( 73 ) Letter from Denmark of 15 October 2010.

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L 50/32
EN
Official Journal of the European Union
23.2.2012
End-user charges
Article 106(2) TFEU. It would be commercially pointless
to close the public service channel, as it provides for
(79) User
charges,
which
do
not
qualify
as
State
aid,
provide
a
significant synergies between the main and the niche
more stable operating income and will reassure banks as
channels.
to TV2’s business model. As a result of the restructuring,
the EBIT margin of the company as a whole would
allegedly be between […] and […] %, which would
allow it to manage on its own funds.
VII. SUMMARY OF THE VIEWS OF INTERESTED THIRD
PARTIES
TV2
(80) Although
changes
in
the
pricing
and
structure
of
the
distributor packages are impossible to predict, the intro
(84) In
its
comments,
TV2
first
refers
in
general
to
what
it
duction of user charges for TV2 should not lead to
considers to be key points in the assessment of the
indirect financing from, or capacity reduction for, TV2’s
restructuring plan.
competitors. This new financing is regarded as a change
in TV2’s baseline long-term financing conditions which
will put TV2 on equal footing with its private competi
tors ( 74 ).
Public service obligations of TV2 and legal basis
(85) TV2
claims
that
its
principal
activity
lies
in
extensive
and
expensive public service obligations that govern the
Compensatory measures
enterprise’s main channel. TV2 states that such activity
currently accounts for more than […] % of the costs of
(81) Finally, the Danish authorities claim that the proposed
the main channel.
compensatory measure of a standstill on launching new
TV broadcasting channels (now also radio channels)
constitutes a real sacrifice for TV2 Danmark A/S,
owing to its interest in a diversification strategy to
maintain its overall market share, the loss of revenue
(86) TV2 refers to the political decision that led to the current
incurred and the first-mover advantage that it will
situation. The Danish Government and the parties that
confer on competitors, which are currently launching
supported the current Media Policy Agreement agreed
new channels and will continue to do so. Denmark
that under the restructuring plan, public compensation
later took the view that the measure should end when
would not be reintroduced for expenses that TV2 bears
all aid measures have been repealed, i.e. as of the date of
in discharging its public service obligations. It was
this Decision.
decided, on the other hand, to introduce a sustainable
market-based business model for TV2 which would
ensure that the enterprise could compete on the
relevant markets despite its public service obligations, a
decision welcomed by TV2. TV2 argues that the most
(82) As to the idea suggested in the opening decision — of
important element in this context is the removal of the
amending TV2’s capacity to broadcast premium content
previous ban on the levying of user charges for the main
— Denmark points out that TV2’s public service
public service channel, effective from 1 January 2012.
obligation covers sports, including major sporting
TV2 claims that the aid does not entail operational or
events, and aid to film production. In addition,
commercial advantages, but simply ensures that TV 2
Denmark argues that the standard contracts preclude
will be able to use financing options open to its
TV2 from assigning rights to third parties, which
competitors. TV2 argues that its main channel cannot
stands in the way of auctioning.
be seen in isolation, as both the main channel and the
niche channels underpin the group’s financial result. TV2
cannot, in any case, fail to discharge its public service
mission, which should be acknowledged when applying
Legal basis
the Guidelines or Article 106(2) TFEU.
(83) Denmark considers that the restructuring process
complies with the provisions of Article 107(3)(c) TFEU.
However, Denmark acknowledges that according to the
The competition situation
PWC income projections, the main channel would still be

loss-making after the end of the restructuring period ( 75 ).
(87) TV2 notes that despite the fact that it dominates the
Denmark points out that TV2 is obliged to fulfil a public
Danish television advertising market, competition in
service mission, which it cannot fail to discharge. This
this market is strong and is characterised by the
special situation of TV2, due to its public service mission,
presence of financially robust multinational groups.
should be taken into account when assessing the case
TV2 also claims that its main competitors are not
under the rescue and restructuring Guidelines or
prevented from entering the market, since they have
launched a number of new channels in the Danish
( 74 ) Letter from Denmark of 9 September 2009, p. 16.
television market (e.g. SBS 6 (Pro 7), TV3 Puls (MTG)
( 75 ) Letter from Denmark of 9 September 2009, pp. 10 and 11.
and Canal 9 (Bonnier)).

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23.2.2012 Official
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of
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European
Union L
50/33
(88) Moreover,
in
relation
to
the
competition
situation
within
as public service compensation would not be preferable
the Danish television market, TV2 claims that it has
to the introduction of end-user charges, in terms of State
experienced significant reductions in both market and
aid law.
audience shares ( 76 ), which […], inter alia because of
the switching-off of the analogue signal in November
2009. TV2 also argues that the ban on launching new
television channels until 2012 will further reduce TV2’s
competitiveness and thus weaken the enterprise.
Compensatory measures
(92) TV2
stresses
that
being
prevented
from
launching
new
channels is a real sacrifice. It points out that with the
digital switchover and sale of its network, it loses the
advantage it has hitherto enjoyed via its co-ownership
of the network. In response to the opening decision’s
(89) As
regards
the
pay-TV
market,
TV2
points
out
that
the
question of whether the sale of certain programmes to
group does not have a dominant position on this market,
third parties or restrictions on broadcasting (e.g. sports)
while also noting that the only major Danish commercial
should be considered, TV2 responds that the standard
TV channel not operating on the market is TV2’s public
contracts bar TV2 from assigning rights to third
service channel. Furthermore, TV2 estimates that the
parties. Danish fiction and sports are part of TV2’s
niche channels currently have a share of approximately
public service programming.
[…] % of the pay-TV market, and expect the station’s
total market share to rise to around […]-[…] % once
TV2 can start levying user charges for the main public
service channel in 2012.
SBS
(93) SBS sees no reason why a series of possibly bad
management decisions should lead to a change in the
financing model with significant distortive effects on
Firm in difficulty/duration of the restructuring plan
competition. SBS asserts that leaving bad investment
decisions aside, TV2 had positive results in the 2004-
(90) TV2
points
out
that
it
was
not
able
to
obtain
any
loans
2008 period and enjoys a dominant position on the
from banks and that it was not even easy to get a
TV advertising market. It is furthermore of the opinion
mortgage for its property in Kvaegtorvet. TV2 points
that the restructuring plan goes far beyond what is
out that the uncertainty resulting inter alia from the
necessary. The net present value of the right to charge
open State aid cases has deterred banks from providing
end-user fees is much greater than the estimated optimal
the necessary financing. TV2 considers the duration of
equity as identified in the recapitalisation decision. SBS
the restructuring plan to be appropriate and points out
also raises the point that aid granted to the regional
that any improvement in its financial situation will only
channels in the form of licence fees of some DKK
affect its draws on the credit facility, and not its business
400 million annually should be included in the
model, which should ensure TV2’s profitability in the
assessment of the impact of the restructuring plan.
medium and long term.
Firm in difficulty
(94) SBS
claims
that
neither
TV2,
nor
any
of
its
subsidiaries,
is
End-user charges
eligible for aid under the restructuring guidelines. In this
(91) TV2
argues
that
the
introduction
of
end-user
charges
for
respect, SBS points out that TV2 Denmark, in its first
the main public service channel does not entail State aid,
half-yearly report for 2009, had a net equity of DKK
but merely gives the channel the same opportunities as
644,9 million, and that the company does not fulfil the
its competitors to use the market’s most conventional
criteria for insolvency proceedings. Any loss resulting
means of operating on the market, namely charging
from the public service obligation should be analysed
users who choose to use its services. Distortion of
under Article 106(2) TFEU, which has not been
competition could be remedied by applying Article 101
invoked by the Danish Government.
or 102 TFEU. According to TV2, the end-user charge,
among other elements of the restructuring plan, does not
entail any distortion of competition on the relevant
markets. TV2 argues in this respect that the plan will
ensure that the TV2 group, particularly the main public
(95) SBS argues that the cost allocation between the different
service channel, will have the necessary liquidity until the
parts of the TV2 group must be properly assessed,
introduction of end-user charges. TV2 also states that an
especially since the costs of the niche channels are very
alternative re-introduction of non-market based funding
low compared to those of competitors. The main channel
was regarded as a stand-alone operation which could be
( 76 ) See recital 38.
made profitable by proper pricing standards.

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L 50/34
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Official Journal of the European Union
23.2.2012
(96) SBS
asserts
that
the
TV2
Group
was
profitable
in
the
unless the plans for user charges are dropped. SBS also
2004-2008 period, if the now abandoned loss-making
states that the anticompetitive effects of the user charges
activities such as TV2 Radio and the impact of the
are clear, and particularly that it may lead to some
Commission’s recovery decision are taken out of the
operators having to leave the market and that it will
equation. In any event, TV2 could become profitable,
also allow TV2 to invest even more aggressively in
e.g. by reducing costs.
new content. This is a bad thing, particularly because
TV2 is exceptional in that it holds a dominant position
on the advertising market.
(97) SBS
furthermore
takes
issue
with
the
market
analysis
supplied by Denmark. SBS particularly disagrees with
the outlook for the advertising market, which it expects
Compensatory measures
to grow from 2010 ( 77 ).
(102) SBS claims that there is a need for sufficiently strict
compensatory measures. It therefore suggests that TV2,
firstly, should not be allowed to introduce user charges.
Secondly, public tendering should be introduced to
ensure more correct internal transfer pricing when
programmes are sold from TV2 to its subsidiaries.
(98) SBS states that the restructuring plan, if it is to be
Thirdly, TV2 regional channels could be transferred to
approved at all, should be limited to the time it would
Danmarks Radio, since the regional channels receive
take to sell off assets to address liquidity issues.
substantial amounts of State aid and because households
paying a licence fee and also receiving pay-TV would be
paying twice for the TV2 regional channels. Fourthly,
TV2 should be required not only to not launch new
commercial channels, but also to sell at least some of
End-user charges
the existing channels. Lastly, TV2 should be obliged to
allow advertising from competing operators on its
(99) SBS
states
that
the
introduction
of
end-user
charges
will
network.
in practice have the same effect as an increase in licence
fees, and should be classified as State aid in line with
Case C-206/06 Essent Netwerk Noord BV. There are
significant differences from Case C-345/02 (Pearle),
because the measure was introduced on the sole initiative
(103) SBS also suggests that a number of safeguards should be
of Denmark and TV2, and because user fees are not
put in place so as to ensure that TV2 does not use the
earmarked for specific purposes chosen by the viewers.
aid and/or user charges to distort competition. Firstly,
Denmark should not be allowed to apply discriminatory
user charges. Secondly, TV2 should not be allowed to
bundle the main channel with the other channels on
the distribution market, and TV2 should be obliged to
(100) SBS stresses the importance of analysing end-user charges
supply TV2 as a stand-alone channel. Thirdly, TV2
within the framework of the restructuring aid. An
should be barred from using the aid or user charges
agreement to introduce end-user charges is likely to
for any activity other than the main channel, and from
affect TV2’s market behaviour and that of relevant
dumping prices in the advertising market. Fourthly, TV2
third parties such as banks, as of the date of approval
should be obliged to give an undertaking that it will not
of the restructuring plan rather than the date of imple
use non-transparent rebates.
mentation of the end-user charges. It further criticised the
fact that there is no cap on the amount of end-user
charges which TV2 is able to levy, nor any conditions
regarding its use. End-user charges can also be used to
finance commercial activities.
MTG/Viasat (Viasat)
Firm in difficulty
(104) Viasat asserts that TV2 is not a firm in difficulty, pointing
in particular to the profit in 2008. It claimed that TV2
(101) SBS states further that the introduction of end-user
would be profitable in the future, referring, inter alia, to
charges cannot be reconciled with the concept of
TV2’s profit for the first half of 2009 (which forecast a
public service. This means that the restructuring aid as
profit of DKK 249 million before tax). In view of the
such cannot be justified under Article 106(2) TFEU
later information that TV2 in fact made a loss for
2009, Viasat considers this minor loss to be associated
with an overall drop in the advertising market of 18,7 %
( 77 ) SBS, on page 13 of its letter of 2 October 2009, says that a fall in
compared to 2008. It shows that TV2 has now managed
advertising revenues of 10 % per year is highly unlikely. However,
to adjust its costs to the current commercial and financial
as this will be seen later, this seems to be based on a misunder
standing of the PWC report, which does not indicate a 10 % annual
environment. As concerns the losses in 2007, Viasat
decrease.
points out that these are mainly due to TV2 Radio,

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23.2.2012 Official
Journal
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European
Union L
50/35
which has subsequently been sold off. TV2 did have a
of each activity in isolation. The main channel should
decrease in turnover in 2008, but so did most firms, and
thus not be assessed in a stand-alone perspective.
TV2 still managed to increase its pre-tax profits.
Notwithstanding this, the transfer pricing between TV2
and the niche channels is flawed as the price is signifi
cantly less than cost. Viasat supplies calculations of
profitability in which costs are split according to the
channels’ turnover. Viasat also states that when
(105) Viasat claims that there is no evidence of short-term cash
compared to the performance of comparable media
flow needs. TV2 has, on the contrary, recently spent a
companies, the niche channels’ financial performance
considerable amount on new film acquisitions, and has
strongly suggests that the segmented reporting in the
also increased its costs, which according to Viasat is due
TV2 group should be disregarded. Viasat finally
to an increase in its programming stock, a cost increase
remarks that TV2 could auction the right to retransmit
in the area of general fiction and over-investment in
its most attractive programmes, excluding sporting
expensive Danish fiction ( 78 ).
events, e.g. drama, fiction and documentaries, to boost
profits for the main channel. Viasat also fears that the aid
could be used for aggressive market behaviour and states
that TV2 in the past invested in drama series acquisitions
by outbidding competitors, raised prices for TV2 news
(106) In more detail, Viasat stresses that even though a large
and granted rebates.
part of TV2’s interest-bearing debt is still short-term, this
is not a problem as long as TV2 can refinance it. TV2’s
financial costs dropped in 2009 from DKK 49,2 million
to DKK 19 million. TV2 has also spent substantial funds
on new content acquisition. Furthermore, the negative
End-user charges
cash flow in the 2006-2008 period was mainly due to
unusually large investment activities, and not costs
(110) Should the Commission come to the conclusion that
related to TV2’s operating activities. The negative cash
there is a need for aid, that aid should target the
flow could thus have been eliminated by postponing or
immediate problem, i.e. the cash flow, rather than oper
reducing investments. In the same vein, the reason why
ations. This means that TV2 should not be allowed to
TV2 had an increase in its debt was that TV2 invested
become a pay-TV channel, as it would be sufficient to
heavily during 2006-2008.
supply it with a credit facility. Moreover, the introduction
of user charges will supply TV2 with funds with which it
will be able to continue abusive behaviour in the adver
tising market, and risk eliminating competitors from the
market. Viasat also questions whether the scheme is in
(107) Viasat also points out that the interest burden seems to
line with TV2’s universal public service obligation.
have decreased as of 2008. Viasat also questions whether
TV2 has problems in obtaining loans, since it seems that
TV2 sought to obtain loans from Danske Bank only.
Moreover, this took place at a time when it was more
difficult to obtain a loan than it is now.
(111) Viasat primarily emphasises the anticompetitive impact
of user charges, because these will push other operators’
programmes towards more expensive programme
packages, leading them to lose revenue from
subscriptions and advertising.
(108) Regarding the exogenous factors, Viasat agrees with the
assumption in the opening decision of a 1,02 % GDP
growth per year. Viasat especially notes that the
forecasts concerning the growth of the advertising
market made by PWC, on which the Danish Government
Compensatory measures
relies, are substantially more conservative than those by
others, especially forecasts made by firms that are active
(112) Viasat moreover claims that the compensatory measures
on the market. In its comments on the opening decision,
suggested are in fact not a sacrifice, as there is no room
Viasat provides its own forecast for the TV2 group for
for further channels anyway. As stated above, Viasat
the 2009-2019 period (report Audon Partners), which
remarks that TV2 could auction the right to retransmit
shows that TV2 will not be condemned to going out
its most attractive programmes (excluding sporting
of business in the short or medium term.
events), e.g. drama, fiction and documentaries, to boost

profits for the main channel.
(109) As regards the profitability of the public service channel,
Viasat stresses that the TV2 Group consist of such
Legal basis
synergies that it is impossible to consider the profitability
(113) Finally, Viasat also states that it is unlikely that
Article 106(2) could be invoked by the Danish
( 78 ) Letter from Viasat on 26 May 2010, p. 4.
Government.

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L 50/36
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Official Journal of the European Union
23.2.2012
Boxer TV A/S (Boxer)
since this sale has already taken place and is therefore no
longer relevant to the case. The Commission no longer
(114) Boxer states that the introduction of the user charges will
considers this measure to be notified.
partly remedy the current anticompetitive situation in
which Boxer, unlike any other platform provider,
cannot commercially utilise the fact that it broadcasts
TV2. Boxer suggests that the pricing of TV2 should be
(120) In the following, therefore, the Commission will still
made subject to control, either political or by the
assess the remaining notified measures (loan and
competition authorities.
temporary and restructuring credit facilities) as well as
the credit facility from the rescue aid authorisation,
which remains in place.
Other parties
2. Presence of State aid within the meaning of
(115) Regarding the restructuring aid, some parties question
Article 107(1) TFEU
whether TV2 is in difficulty (ASK) and whether the
compensatory measures in a saturated market are not
(121) Article 107(1) TFEU states:
too weak (FDA). Some state, however, that if the
company is in difficulty, user charges could be
considered (DI, TDC). Some consider the restructuring
‘Save as otherwise provided in the Treaties, any aid
period to be too long (Discovery). Others state that if
granted by a Member State or through State resources
TV2 will be an economically stable company by 2012, it
in any form whatsoever which distorts or threatens to
should not be allowed to introduce the user charges.
distort competition by favouring certain undertakings or
the production of certain goods shall, in so far as it
affects trade between Member States, be incompatible
with the internal market.’
(116) On the end-user charges: Some parties (Langkilde, MTV
Networks AB, FDA, Discovery, Stofa) submit that the
user charges will lead to small channels being pushed
(122) In order for Article 107(1) TFEU to be applicable, there
out of the existing pay-TV packages or to customers
needs to be an aid measure imputable to the State which
having to pay more.
is granted by state resources, affects trade between
Member States and distorts competition in the
common market by conferring a selective economic
advantage to certain undertakings. The application of
(117) Some parties think that an end-user charge of DKK 25 is
these conditions to the measures at hand is examined
too high (FDA, TDC). FDA also thinks that the levy of
below.
such end-user charges is not compatible with TV2’s role
as a public service broadcaster.
2.1. State resources
L o a n / c r e d i t f a c i l i t y
VIII. ASSESSMENT UNDER THE STATE AID RULES
(123) The subordinated loan and the temporary credit facilities
from the original rescue aid and under the restructuring
1. Scope of the assessment
plan ( 80 ) involve funds released by the Government with
the agreement of the Folketinget from the general budget
(118) As can be seen from the submission of Denmark, the
of Denmark, thus constituting state resources.
notified restructuring plan has not been withdrawn.
Denmark states that there is no need for aid measures
and that all aid measures will be repealed once the
restructuring plan, including the end-user charges, has
(124) Denmark submits that the interest rates and charges are
been approved and TV2 is not required to make
those applied on the market for healthy firms. In
additional payments resulting from the Commission’s
applying the same conditions to a firm in difficulty
two previous investigations involving TV2 (
such as TV2, Denmark is foregoing state resources. The

79 ). In other
words, the Commission has not yet received uncon
reason is that a private creditor would take into account
ditional confirmation from Denmark that these
the financial difficulties of TV2 and would either not
measures are no longer part of the restructuring plan
grant a loan or credit facility at all, or do so at rates
and thus no longer within the scope of the Commission’s
which are higher than for healthy companies.
formal investigation.
E n d - u s e r c h a r g e s
(125) The Commission finds that the right granted to TV2 to
(119) The only exception is the proposed guarantee of the
charge end-user charges as of 2012 does not constitute
broadcasting network sale, which will not materialise
( 80 ) This has already been assessed in Commission Decision N 287/08
( 79 ) Letters from Denmark of 15 October 2010 and 28 January 2011.
of 4 August 2008.

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23.2.2012 Official
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the
European
Union L
50/37
state resources within the meaning of Article 107(1)
legally obliged to pay the charges, but pay the remun
TFEU. The end-user charges are of private origin ( 81 )
eration as part of a contractual arrangement into which
and are paid directly by consumers to the distributor
they enter voluntarily. Nor are the charges collected by a
as remuneration for viewing the TV2 channel. TV2 has
public institution as was the case for the licence fee, but
to enter into normal commercial negotiations with the
by the private operator Boxer and other private
distributor to have its channel included in a digital
distributors on the other platforms. The State will not
package and to agree on an acceptable remuneration.
be involved in any enforcement action in cases where
There is no legal provision which forces the distributor
users do not pay the charges; the distributor would
to carry the TV2 main channel in its package, since the
have to bring a civil action to obtain payment.
current must-carry obligation laid down in Article 6 of
the Danish Broadcasting Act will be repealed upon the
introduction of the end-user charges system. Nor are the
end-user charges, or their amount, under the permanent
control of the Government, or available to it ( 82 ). The
Government is not involved in any price setting, which
is a commercial decision by TV2, nor does it collect the
charges for TV2 or control or dispose of them in any
way.
(128) The fact that TV2 is granted the right to charge
subscription fees by a change in the licence granted by
the Ministry of Culture is not sufficient to find that state
resources are involved. It is not a case of state inter
vention leading to a loss of state resources. In that
regard, the reference by SBS to the Essent Netwerks
case is not relevant. Paragraph 73 of the quoted
(126) The user charges cannot be equated with the charging of
judgment establishes a distinction between the situation
the licence fee, as claimed by SBS. SBS argues that the
in Essent and that of the Pearle case ( 87 ), by stating that
user charges will in practice have the same effect for
in the former, the charge in question was embedded in a
households as an increase in the licence fee, since
policy determined by the authorities. In order to
distributors’ operating packages will always include TV2
distinguish the cases, the Court refers in Essent to the
Danmark. This compulsory element, Together with the
introduction of the charge by legislature, but does not
fact that user charges can only be amended through a
stipulate that any state intervention by legislation auto
legislative amendment ( 83 ), should qualify them as State
matically leads to an involvement of state resources. This
aid ( 84 ). In this regard, SBS cites the Court’s case-law in
is clear from the cited Essent judgment itself, since
Essent Netwerks ( 85 ).
paragraph 75 of that judgment further distinguishes the
case from the Preussen Elektra case, which did involve a
legislative act (and in which no State aid was found to be
involved) obliging electricity suppliers to purchase elec
tricity produced in their area of supply from renewable
sources at a minimum price. The Court states that in
Essent, the undertakings in question had been
appointed to ‘manage a state resource’, contrary to the
(127) However, contrary to the previous licence fee
situation in Preussen Elektra ( 88 ). In the case in question,
arrangement in Denmark, which the Commission
TV2 is not called upon by the State to manage a state
indeed regarded as State aid ( 86 ), end users are not
resource. The change in the licence implements only an
already existing right to an additional source of income
( 81 ) For payments between private undertakings see Case C-379/98,
(for the legislation, see Section 38a(2) of the Danish
Preussen Elektra [2001] ECR I-2009. In this case, the State
Broadcasting Act).
imposed the charging of a certain minimum price, while in the
case at hand the Danish Government is enabling TV2 to charge
user fees in the same manner as its competitors.
( 82 ) Case C-83/98 P France v Commission [2000] ECR I-3271, paragraphs
48 and 50, Case T-358/94, Air France v Commission [1996] ECR
II-2109.
( 83 ) SBS is referring to the legislative change which was the model
anticipated at the time when SBS submitted its comments.
However, the Danish Government no longer envisages an
amendment to the Broadcasting Act, but simply an alteration of
the licence. It thereby exploits a possibility which is already
anticipated in the current Section 38a(2) of the Danish Broadcasting
(129) The Commission therefore finds that the end-user
Act, namely that the company is entitled to charge subscription fees
charges do not involve state resources within the
if the Ministry of Culture so decides and alters the licence accord
meaning of Article 107(1) TFEU.
ingly.
( 84 ) Letter from SBS of 2 October 2009, pp. 19-22.
( 85 ) Case C-206/06 Essent Netwerk Noord BV a.o. v Aluminium Delfzijl BV
( 87 ) C-345/02, Pearle and others [2004] ECR I -7139.
[2008] ECR II-5497.
( 88 ) In C-206/06 (see footnote 85 above), the Court establishes in para
( 86 ) Commission Decision 2005/217/EC (OJ L 85, 23.3.2006, p. 1), as
graphs 66 and 47 that the surcharge in question is a real charge,
per paragraph 57, upheld on this point by Cases T-309/04, T-
whose excess has to be paid by the recipient to the Minister (see
317/04, T-329/04 and T-336/04, TV2 Danmark a.o. v Commission,
paragraph 67 and description of the law in paragraph 19 of the
paragraphs 158 et seq.
judgment).

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2.2. Selective advantage
4. Compatibility of the State aid with the internal
market
(130) The state resources involved confer an economic
advantage on TV2 in that the same financial instruments
4.1. Legal basis
at market conditions would attract a higher borrowing
cost, or higher fees, if any market operators agreed to
(135) The compatibility of the measures will be assessed under
make further funds available to the beneficiary at the
Article 107(3)(c) TFEU in conjunction with the Guide
amount envisaged. According to the evidence submitted
lines. The application of Article 106(2) TFEU to the
by Denmark, none were willing to do so.
measures in question in relation to financing of public
service broadcasting is not analysed. While the financial
difficulties of TV2 mainly originate from the provision of
the public service channel and the absence of a business
model with stable revenue sources, the State aid measures
are not limited to public service provision, but are
2.3. Distortion of competition and effect on trade
directed at TV2 as a group, i.e. including its commercial
activities. Furthermore, the Danish authorities have not
(131) These resources will allow TV2 to continue operating on
markets on which it is currently active. These markets
argued in detail that the State aid measures were
include the market(s) for sale and purchase of broad
compatible with the internal market on the basis of
casting rights, the market(s) for pay-TV services and the
Article 106(2) TFEU and the Commission has not
market for TV advertising in Denmark. On those
received sufficient information which would enable it
markets, TV2 competes with other broadcasters such as
to carry out the assessment under Article 106(2) TFEU
SBS or Viasat, among others. It follows that by favouring
in conjunction with the Broadcasting Communi
TV2, the aid in question distorts or threatens to distort
cation ( 91 ).
competition on those markets.
(136) The Guidelines provide for the possibility of granting
rescue aid as a temporary assistance for firms in difficulty
pending the preparation of a restructuring plan or to
(132) The affected markets, such as the purchase and sale of
address an acute liquidity crisis. According to point 26
broadcasting rights and TV advertising for products from
of the Guidelines, the deadline for putting an end to the
other Member States intended for sale in Denmark, are
aid is extended until the Commission has reached its
subject to trade between Member States ( 89 ). Moreover,
decision on the plan. The fact that the rescue aid
some competitors of TV2 Danmark A/S broadcast their
facility is still in place for TV2 is in line with that stipu
channels from the United Kingdom and/or are
lation, as TV2 has submitted a restructuring plan within
subsidiaries of groups incorporated in other Member
the deadline.
States, whose decision to remain or increase their
activity on the Danish market may be influenced by
the planned aid. The State aid in question therefore
affects, or risks affecting, patterns of trade between
Member States.
(137) Restructuring aid must be based on a feasible, coherent
and far-reaching plan to restore the firm’s long term
viability within a reasonable time frame. Restructuring
usually involves the following elements: the restructuring
of all aspects of the functioning of the company, the
reorganisation and rationalisation of the firm’s activities,
(133) Since Article 107(1) TFEU applies, the restructuring aid
including the withdrawal from loss-making activities and
package needs to be assessed in terms of its compatibility
financial restructuring. Restructuring operations, if bene
with the internal market.
fiting from State aid, cannot be limited, however, to
making good past losses without tackling the reasons.
Furthermore, the restructuring has to be financed at
least partially by the own resources of the company.
Finally, compensatory measures must be adopted to
minimise the distortive effects of the aid. The
3. Standstill obligation
Commission will in the following examine whether
(134) Denmark has respected the standstill obligation
these conditions are met.
mentioned in Article 3 of Council Regulation (EC) No
659/1999 ( 90 ), since it notified the aid measures under
the restructuring plan and has to date not implemented
them. Implementation of the rescue aid was authorised
4.2. Eligibility — Firm in difficulty
by the Commission decision of 4 August 2008.
(138) According to point 9 of the Guidelines, a firm is in
difficulty where it is unable, whether through its own
( 89 ) Regarding the effects on trade between Member States, the Danish
authorities seem to share the same view, see Danish Competition
Authority (Konkurrencestyrelsen) Decision of 21.12.2005, Journal
( 91 ) Communication from the Commission on the application of State
No 3/1120-0301-0095/SEK/SCL.
aid rules to public service broadcasting (OJ C 257, 27.10.2009,
( 90 ) OJ L 83, 27.3.1999, p. 1.
p. 1).

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EN
23.2.2012 Official
Journal
of
the
European
Union L
50/39
resources or with funds it is able to obtain from its
require the company to be in actual insolvency
owners/shareholders, to stem losses, which, without
proceedings. On the contrary, aid can be given —
outside intervention by public authorities, will almost
under strict conditions — to prevent precisely that.
certainly condemn it to going out of business. Point
11 of the Guidelines mentions certain criteria according
to which a firm is in difficulty, even where none of the
criteria of point 10 of the Guidelines are present. Point
11 stipulates that ‘in any event, a firm in difficulty is
(142) As to the arguments of the competitors that TV2 is a
eligible only where, demonstrably, it cannot recover
profitable company, or could become profitable, the
through its own resources or with the funds it obtains
above-mentioned results for TV2 show that the
from its owners/shareholders or from market sources’.
company realised a profit in 2008, but contrary to
what Viasat had estimated, it incurred a loss for 2009
of DKK 27 million, which deviated significantly from the
Viasat forecast of DKK 249 million in profit. The profit
for 2010 is also estimated to be much smaller than that
assumed by Viasat. The Commission has not found any
(139) The Commission comes to the conclusion that at the
errors in the methodologies used by TV2 and its
time of the notification of the restructuring plan, TV2
consultant PWC (see also recital 41 of this Decision).
constituted such a firm in difficulty. This can be seen
from the figures in the Commission’s decision opening
the formal investigation procedure, and more
importantly from the figures produced in recitals 36-42
of this Decision, which were submitted at a later point in
(143) As to the study of TV2’s credit rating submitted by Viasat
January 2010 and which describe a company with losses,
and carried out by Audon partners ( 92 ), according to
declining market shares, mounting debt and in particular
which TV2 could have obtained credit, the reactions of
negative cash flows due to declining advertising revenues,
banks show that the real picture is a different one. The
bad investments and increasing interest charges. While it
analysis is furthermore based only on figures and
turned out later that the company had indeed, as
assumptions which have not been checked with TV2.
competitors estimated, made a profit in 2008 (the
Some of the figures are divorced from reality, as can
estimate at the end of March 2008 still pointed to […]
be seen from the figures for 2009 and 2010. The
of DKK […] million), this profit was small, and does not
report itself stresses that this is not a full-scale analysis
in itself alter the finding that the company could not
(because for obvious reasons no contact with TV2 was
continue its operations without external financing. The
established) and the model used has its limitations for
private credit facilities at the company’s disposal were
that reason ( 93 ).
short term and could be withdrawn any time. The
company had an acute liquidity need which it could
not overcome by its own resources.
(144) The fact that the company has drawn much less on the
rescue aid credit facility than it could have does not
mean that it cannot be regarded as a firm in difficulty.
It would be an absurd finding to disqualify a beneficiary
(140) Nor could it obtain external financing. There was a
of rescue and restructuring aid from eligibility for the aid
danger that short-term credits would be withdrawn. As
if cost-saving measures and other measures envisaged in
already stated in the opening decision, the main
the restructuring plan later prove to be successful, and
financing bank of TV2, […], asked to reduce its loan
help the company to deal with its financing problems
and credit facilities in 2008. In addition to TV2’s
largely using its own resources. This might, however, lead
problems, which even included mortgaging its own
to the result that at a certain point in time ongoing State
premises in Odense, Denmark produced evidence that
aid is no longer necessary, which will be discussed below
other banks had also refused to provide TV2 with
(see recital 149). In any event, the credit facility was
long-term loans (see recitals 44 et seq. of this Decision).
always constructed in such a way that the company
The banks pointed to the weaknesses in TV2’s cyclical
could only get access to it in the event of a certified
income stream based on advertising revenues, which as a
need. This was done in order to keep the aid to the
business model was considered unsustainable. Pending
minimum, and TV2’s behaviour in trying to achieve the
legal cases added to the problems. As a result, TV2’s
restructuring process as much as possible using its own
funding became increasingly tilted towards short-term
resources is in line with that requirement.
liabilities, and thus fragile. In other words, TV2 was
unable, within the meaning of point 11 of the Guide
lines, to recover from the situation using funds
obtainable from market sources.
(145) It should furthermore be underlined that the numerous
allegations by Viasat and SBS that TV2’s weak financial
situation is self-inflicted through poor management
decisions or bad investments is irrelevant for its eligibility
(141) These findings are not called into question by the
( 92 ) Letter from Viasat of 2 October 2009, Annex 14, ‘Findings
submissions from competitors. For completeness, it
concerning a credit rating analysis of TV2 Denmark’.
should be mentioned that the Guidelines do not
( 93 ) Letter from Viasat of 2 October 2009, Annex 14, p. 13.

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L 50/40
EN
Official Journal of the European Union
23.2.2012
under the Guidelines, which do not ask for the cause of
TV2 was able to pay back part of its debt, and the
the financial problems of the aid beneficiary, but only
financial outlook became much more positive, as can
seek to ascertain that the aid beneficiary is indeed a firm
be seen from the figures in recitals 62-64 of this
in difficulty.
Decision. Trends in the advertising market are also
more positive ( 94 ). TV2 was able to repay its state loan
drawn from the rescue aid facility. Subject to the
outcome of the pending State aid cases and the
approval of the restructuring plan, TV2 expects to have
(146) Competitors have also, in this respect, asserted that TV2’s
sufficient financing until January 2012 when the
problems largely stem from the public service channel
subscription charges will be implemented ( 95 ).
and that internal cost and transfer pricing adjustments
could remedy this situation. However, the Commission
does not consider this argument relevant in a situation in
which the aid goes to the group as such, including the
commercial operations. The Commission notes, however,
that TV2 has separate and audited accounts for the
(150) Given that new situation, the Commission does not find
that TV2 can still currently be classified as a firm in
public service and other activities, and a fully docu
difficulty. There is therefore no need for any aid
mented and audited transfer pricing policy, which is
measure beyond the approval of this Decision, and the
relatively simple, transparent and aims to give an
notified, non-implemented loan and credit facility
accurate picture of the different activities based on
contained in the restructuring plan should be repealed.
transfer prices on market terms.
For the same reason, the existing aid facility under the
rescue aid decision should also come to an end.
(147) On the exogenous factors, Viasat agrees with the
assumption of a GDP growth of 1,02 %. On the devel
opment of the advertising market, the parties agree that
4.3. Restoration of long-term viability
TV2’s advertising revenues decreased by 19 % in 2008.
However, Viasat and SBS wrongly interpret Denmark’s
(151) Pursuant to point 34 of the Guidelines, the grant of the
forecast on the future development of the advertising
aid must be conditional on implementation of a restruc
market. Contrary to their understanding, Denmark did
turing plan which must restore viability to the company
not forecast that the advertising market would drop by
within a reasonable timescale. The restructuring plan
10 % each year in the 2009-2013 period, but simply
describes the circumstances that led to the company’s
stated that […].
difficulties as having been caused by new activities

which did not turn out to be profitable, and the
increasingly unprofitable public service channel. In the
Commission’s view, the restructuring plan adequately
addresses these issues.
(148) Regarding the argument that licence fees granted to the
regional broadcasting stations should have been included
in the assessment of TV2’s financial situation, the
Commission finds that the licence fees finance the
programme production of regional broadcasters and are
(152) The Commission notes that the restructuring plan
relevant only in relation to that. In this regard, the
provides for financial and operational restructuring
Commission notes that the regional TV2 stations are
measures which, together with an amended business
independent from TV2 and subject to their own public
model, will enable the company to stand on its own
service obligations under the Danish Broadcasting Act,
feet. In this regard, the Commission firstly notes that
for which they receive licence financing. As to SBS’s
the requirement in the restructuring plan to sell assets
argument that viewers will pay twice for the programme,
resulted in the successful sale of the broadcasting
it should be stressed that one of the payments — the
network, which provided TV2 with sufficient funds to
subscription fees for TV2 main channel — result from
repay its debts. It also repaid the aid drawn from the
the customer’s choice and have been found not to
rescue aid facility on 4 October 2010. The company
involve any State aid. In any event, it has been shown
itself states that it has now sufficient means to bridge
above that TV2 as a group was a firm in difficulty
the period until the end-user charges will be adopted ( 96 ).
suffering from acute financing needs, since it could not
Other measures in the form of cost savings will also
obtain any external financing from banks. This included
contribute to the long-term viability of the firm (see
any potential benefits resulting from its obligation to
recitals 47 and 48 above).
broadcast these programmes.
( 94 ) According to the letter from Denmark 9 July 2010, Annex ‘TV2
Financial questions’, p. 7, a 5 % fall in the advertising market was
forecast for 2010, but now the Zenith Optimedia forecast predicts a
1 % increase.
(
(149) TV2’s dire situation changed, however, with the sale of

95 ) Letter from Denmark of 9 July 2010, ‘TV2 Financial questions’,
p. 4.
the broadcasting transmission network. Using the
( 96 ) Letter from Denmark of 15 October 2010, Annex 1, TV2 docu
proceeds from the sale of the broadcasting network,
ments, at the end of point 2.

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EN
23.2.2012 Official
Journal
of
the
European
Union L
50/41
(153) The company is also giving up loss-making activities; in
should this event takes place before 31 December 2012.
2008, it sold its loss-making radio operation to the SBS
It currently seems that TV2 is legally entitled to charge
group.
user fees only when its licence has been changed (while
the current Danish Broadcasting Act already provides a
possibility for TV2 to charge end-user fees, it is not
allowed in the current licence).
(154) The company is expected to solve the structural
problems leading to its liquidity needs by being
permitted to charge subscription fees as of January
4.4. Avoidance of undue distortions of competition
2012. The lack of profitability of the public service
channel is due to its reliance on one source of income
(157) According to point 38 of the Guidelines, in order to
in the form of advertising revenue, which is cyclical and
ensure that the adverse effects of the aid on trading
sensitive to the economic climate. This is also demon
conditions are minimised as much as possible, so that
strated by the reactions of banks, which refused to
the positive effects pursued outweigh the adverse ones,
provide funding due to their concerns about trends on
compensatory measures must be taken. These measures
the advertising market and doubts as to TV2’s earning
may comprise divestment of assets or reductions in
ability. The new business model will provide TV2 with a
capacity or market presence. According to point 40 of
more stable income base by charging subscription fees
the Guidelines, they must be in proportion to the
for the viewing of its main channel. TV2 has forecast
distortive effects of the aid and the relative importance
additional income from the end-user charges of DKK
of the firm on its markets.
[…] million in 2012. It also forecasts […] for the
group in 2012. The Commission notes that besides
[…], the second source of revenue in the form of end-
user charges will also make the company less vulnerable
(158) In principle, the commitment not to open any new
to downturns in cyclical activities. The Commission notes
channels (i.e. limiting market presence), can be seen as
that the measures to achieve the turnaround originate in
a compensatory measure, as it excludes TV2 from
the restructuring plan itself and not from external factors.
competing for new customers and therefore benefits its
competitors. The opening of new commercial channels
would be beneficial to TV2 because the channels would
be financed by a steady revenue source based on non-
cyclical subscription fees, and because they would
(155) The originally notified duration of the restructuring plan
provide the necessary income to the group, partially
until 31 December 2012 spans a period of almost 4
counterbalancing the negative results from the public
years. This period was chosen because the Danish
service channel. According to the market analysis
Government believed that with the introduction of a
provided in the restructuring plan, the pay-TV market
new business model and its first experiences in
is growing ( 97 ). TV2’s competitors, however, argue that
practice, banks would again be willing to lend money
the option of opening new commercial channels was
to TV2, i.e. the period was chosen to be long enough
not available to TV2 anyway, since the market was satu
to amass this experience. However, given that all aid will
rated.
be repealed with the adoption of this Decision (see
above), the Danish Government now considers that the
restructuring period should end on the repeal of all aid
measures.
(159) In this regard, the Commission notes that TV2’s
competitors themselves launched channels in 2009
(SBS launched 6erene, Canal Digital will launch a
sports channel, Viasat launched a channel on 23 March
2009, and the TV4 group launched Canal 9 in July
(156) The Commission takes a different view. According to the
Guidelines, restructuring should result in the company’s
2009).
return to long-term viability. The Commission considers
that the restructuring period lasts until the moment when
the company has implemented all restructuring measures,
ensuring such long-term viability. While all State aid
(160) Denmark has also confirmed that due to the restruc
measures will cease immediately on adoption of this
turing, TV2 will also be prevented from launching
Decision, the restoration of long-term viability to TV2
radio channels ( 98 ). This commitment is highly relevant
is not guaranteed as of this moment as long as TV2
in that there is an upcoming tender procedure for the
still lacks a sustainable business model. Such a business
operating licence for the new FM 4 radio station.
model will only be established with the introduction of
Denmark originally expressed an interest in TV2’s
the end-user charges. The introduction of end-user
possible participation in this tender, but later confirmed
charges is also the main restructuring measure directly
that such a bid would not take place in view of the
addressing the most serious cause of TV2’s financial
Commission’s ongoing investigation of the restructuring
difficulties. The Commission therefore concludes that
plan, despite the fact that plans for this had already been
the restructuring period comes to an end on
31 December 2012, or at the point in time when TV2
( 97 ) Notification of 4 February 2009.
is able to charge subscription fees from the end user,
( 98 ) E-mail from Denmark of 24 February 2011.

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L 50/42
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Official Journal of the European Union
23.2.2012
made. In other words, contrary to what the competitors
that the compensatory measure commitment can come
claim, the commitment not to open new channels had
to an end with the end of the aid or the date of this
proven to have a real meaning and constitutes a sacrifice
Decision. The Commission considers it feasible, however,
for the company. The Commission considers this
that the obligation not to launch new channels may end
commitment to be important in light of point 46 of
at an earlier date than the end of the period of the
the Guidelines, according to which aid should not go
restructuring plan (31 December 2012), namely when
to finance new investment that is not essential for
the end-user charges have been introduced (via the
restoring the firm’s viability.
change in the licence) and TV2 will be able to levy them.
4.5. Aid limited to the minimum
(161) The Commission also considers the proposed compen
satory measures to be in proportion to the distortive
(163) According to point 43 of the Guidelines, the amount and
effects of the aid measures. It should be pointed out
intensity of the aid must be limited to the strict
that these measures all end on the date of adoption of
minimum of the restructuring costs necessary to enable
this Decision. In that regard, the Commission would
restructuring to be undertaken. The idea behind this
point out that none of the notified restructuring aid
provision is that the company, at the end of restruc
measures has been, or will be, implemented. As can be
turing, is not equipped with surplus liquidity that it
seen from recitals 150 et seq. the rescue aid facility will
could use for aggressive market behaviour. Beneficiaries
also be repealed on adoption of this Decision. This
are expected to make a significant contribution to the
means that the company will not receive any State aid.
restructuring plan from their own resources, including
The actual payments made under the rescue aid facility
the sale of assets that are not essential to the firm’s
were, however, limited (DKK 223 million drawn of DKK
survival. Such a contribution must be real, and may
1 000 million available). Most of the aid was actually
not include expected future profits such as cash flow. It
drawn as rescue aid (DKK 208 out of 223 million were
must be as high as possible, at least 50 % for large firms.
drawn until end 2008, i.e. within the six-month rescue
The Commission considers TV2 to be a large firm in the
period) and all the funds actually drawn from the credit
meaning of the Guidelines.
facility have already been repaid to the State. Nor is the
actual amount drawn from the credit facility — DKK
223 million — excessive in light of TV2’s 2008
turnover ([…] %). In light of this, the Commission
does not consider it necessary to demand further
(164) The Commission does not share the view of the Danish
compensatory measures from Denmark and the aid bene
Government that any costs at all, in particular cost-saving
ficiary. For that reason, the Commission does not see any
measures, automatically qualify as restructuring measures.
need for further compensatory measures, as suggested by
A company might incur expenditure in pursuing cost
the competitors.
savings. Cost savings as described by Denmark in the
present case do not, in themselves, represent a restruc
turing cost. Denmark provided a list of ‘classical’ restruc
turing costs, which consist of DKK […] million and
which cover transaction costs related to the sale of the
transmission network (DKK […] million), costs associated
with the transfer to the new business model (DKK
(162) However, the Commission does not agree with the
[…]-[…] million) and staff costs for termination of
proposal by Denmark that the commitment should
contracts, legal and consultancy fees (DKK […]
cease when all aid measures have come to an end ( 99 ).
million). The Commission accepts these costs as restruc
Firstly, Denmark itself had stipulated a longer restruc
turing costs.
turing period, until 31 December 2012. Secondly, the
Guidelines nowhere stipulate that the length of the
compensatory measure must be identical to the
presence of ongoing aid measures. Thirdly, the restruc
turing plan is based on the premise that it is only when
the end-user charges are introduced in 2012 that the
(165) According to the Commission’s case practice, restruc
company will have access to external financing; only
turing costs include all extraordinary costs incurred in
then will long-term viability be restored. Denmark itself
order for the firm to return to viability, but not regular
has argued that the aid measures, including the rescue aid
operating costs incurred in the restructuring period.
facility which is still in place, would be needed to fill the
However, the present case concerns a company’s need
liquidity gap until a more stable business model for the
of liquidity to bridge a transitional period until a new
public service channel was in place. The rescue aid
sustainable business model is in place. As outlined above,
facility thus had the function of keeping the company
TV2 had a genuine financing need, since it did not have
afloat until a new business model had begun to apply.
access to external financing. In this special case involving
Against this background, the Commission does not find
purely financial restructuring until the company changes
to a more stable business plan, the Commission can also
( 99 ) Letter from Denmark of 28 January 2011 and e-mail from
accept this need of financing as constituting a restruc
Denmark of 15 October 2010.
turing cost. It was the credit facility of the rescue aid

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EN
23.2.2012 Official
Journal
of
the
European
Union L
50/43
decision (DKK 1
000
million) which provided the
on (artificially) high equity are advantageous for the
necessary temporary buffer to cover the financial gap.
company, because it will be able to attract funding at
However, this facility was only transitional and could
relatively low rates. Equally important, TV2 should bring
only be accessed when TV2 could demonstrate a
its capital structure back to a level that ensures that
financing need as certified by an external auditor. In
competition is not distorted. The Commission would
the end, TV2 did not draw much from the credit
like TV2 to revert back to a normal capital structure
facility (only […] % of it). In addition, most of the
by making dividend payments to the State, rather than
credit drawn (DKK […] million) was drawn during the
by aggressively expanding its balance sheet by debt
period covered by the Commission’s rescue aid decision,
financing.
i.e. within the six-month rescue period before the restruc
turing plan was submitted.
4.7. Monitoring and annual report
(170) In line with points 49 and 50 of the Guidelines,
(166) TV2 has contributed towards the above restructuring
Denmark has committed to submitting reports to the
costs through the sale of assets, with the sale of the
Commission no later than 6 months after the approval
broadcasting network for the amount of DKK
of the aid.
640 million, and through external financing by mort
gaging its premises in Odense at DKK 80 million. The
contribution of DKK 720 million is well beyond the
50 % threshold for large firms. As stated above, TV2
used the proceeds from the sale of the network to
4.8. Antitrust issues
reduce its debt. The money thus spent cannot be used
(171) The Commission notes that one of TV2’s competitors has
for other purposes. In addition, as is clear from the
filed an anti-trust complaint regarding the planned intro
above, all aid measures will end as of the date of this
duction of the end-user charges. The Commission is
Decision and no new aid measures as notified under the
aware that aspects of an aid which contravene specific
restructuring plan will be introduced (see recital 150 of
provisions of the Treaty other than the State aid
this Decision). There is therefore no danger, in terms of
provisions may be so indissolubly linked to the object
point 45 of the Guidelines, of any aid in excess of what
of the aid that it is impossible to evaluate them separ
was needed staying in the company.
ately ( 100 ). The Court has stressed that the obligation to
ensure that the State aid rules are applied consistently
with other provisions of the Treaty is all the more
necessary where those provisions also pursue the
4.6. Other conditions
objective of undistorted competition. However, the
case-law of the Court acknowledges that the State aid
(167) According to point 46 of the Guidelines, the
and antitrust procedures are independent procedures
Commission may require additional measures from the
governed by specific rules. The Court has stated that
Member State in order to ensure that the aid does not
‘when taking a decision on the compatibility of State
distort competition contrary to the common interest.
aid with the common market, the Commission is not
obliged to await the outcome of a parallel procedure
initiated under Regulation No [1], once it has reached
the conclusion, based on an economic analysis of the
situation and without any manifest error in the
(168) The Commission takes note of the arguments put
assessment of the facts, that the recipient of the aid is
forward by Denmark throughout the formal investi
not in breach of Articles [101 and 102 TFEU]’ ( 101 ). The
gation, and the intention expressed by the aid beneficiary
antitrust case therefore does not have to be formally
in supporting documents that the restructuring plan
closed for the Commission to take a decision in the
should enable TV2 to use business opportunities in line
State aid case.
with its peers and to charge subscription charges.
Denmark and TV2 further point out that the currently
high equity buffer of TV2 with solvency (and net interest-
bearing debt) ratios which are significantly higher (lower)
than those of competitors, is only necessary because of
(172) The Commission would underline that in the current
the uncertainties of the pending State aid cases and the
case it is not the aid itself (the rescue aid facility), but
business model. Both TV2 and Denmark express a
another element of the restructuring plan (the end-user
general willingness to bring the capital structure back
charges), which is the cause of the antitrust complaint.
in line with TV2’s peers once the State aid investigations
The end-user charges will be introduced in early 2012,
are closed.
( 100 ) See Case C-225/91 Matra [1993] ECR I-3203, paragraph 41,
referring to Case 74/76 Iannelli v Meroni [1977] ECR I-557.
( 101 ) Case C-225/91 Matra, op. cit., paragraphs 44 and 45. The
judgment refers to Regulation 17, which has now been replaced
(169) The Commission does not, on its part, see any need for
by Council Regulation (EC) No 1/2003 of 16 December 2002 on
TV2 to have a capital structure that is different from that
the implementation of the rules on competition laid down in
Articles 81 and 82 of the Treaty (OJ L 1, 4.1.2003, p. 1), and
of its peers once the business model and the pending
to Articles 85 and 86 of the EC Treaty, now Articles 101 and 102
legal cases have been resolved. Capital structures based
TFEU.

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L 50/44
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Official Journal of the European Union
23.2.2012
i.e. after the aid facility has been repealed, via an
(177) Since the company is in a better financial condition
amendment in the terms of TV2’s licence. It should
following the sale of the broadcasting network, the
also be taken into consideration that most of the aid
Commission finds that no aid measures from the restruc
actually drawn was during the rescue period and was
turing plan (loan and credit facility) should be imple
authorised in the Commission’s rescue aid decision of
mented and that the credit facility in place (as authorised
4 August 2008, and that all aid will be repealed when
in Commission Decision No 287/08 of 4 August 2008)
this Decision comes into force.
should be repealed with immediate effect from the date
of this Decision. The Commission notes that the orig
inally notified guarantee for the sale of the broadcasting
network is no longer relevant, due to the completed sale
of the network without the guarantee.
(173) If the antitrust complaint, or third party comments in
this proceeding, is to be understood also as a complaint
against TV2 becoming a pay-TV channel, suffice to say
that the mere introduction of user charges for the main
channel cannot constitute an infringement of antitrust
(178) The Commission further takes note of the commitment
legislation. When TV2’s main channel becomes a pay-
by Denmark that the compensatory measure of not
TV channel, this will lead to the entry into the pay-TV
launching any new broadcasting channels covers both
market of that channel. The entry of TV2’s main channel
television and radio channels. This measure should
will most likely affect only competitors active in that
remain in place until 31 December 2012 or, if the aid
market, and e.g. lead to the exit of some players from
recipient is able to levy end-user charges before that date,
that market (the respective pay-TV packages), or to their
until the introduction of the end-user charges. The intro
having to lower their prices. These effects, however, are
duction of the end-user charges is considered to be the
normal effects of entry into the market of a viable
point in time at which TV2 is legally entitled to ask for
competitor. The mere fact that user charges are intro
such remuneration.
duced, and that this will bring about increased
competition, does not, therefore, contravene Articles
102 and 106 TFEU.
(179) The Commission takes note of the commitment by
Denmark to instruct an independent financial expert to
compare TV2’s capital structure with those of other
(174) The complainant, and some other competitors in the
media companies and to adjust the capital structure if
third party comments, argue that the planned intro
it deviates markedly from the median or average of the
duction of the ‘TV2 Alene’ card would have anticom
relevant peer group. If there are substantial reasons not
petitive effects, also favouring the distributor Boxer. In
to adjust the capital, the Danish Government may notify
short, the TV2 Alene model meant that customers would
an alteration of the restructuring plan to the
receive TV2 free if the customer did not buy other pay-
Commission,
TV services. According to the complainant, the TV2
Alene card would thus have a disincentive effect on
customers planning to buy pay-TV, to the detriment of
TV2’s competitors. As Denmark has withdrawn the
suggested TV2 Alene-card, arguments as to whether it
HAS ADOPTED THIS DECISION:
would have infringed the antitrust rules are devoid of
relevance and do not, therefore, have bearing on the
legality of the restructuring plan.
Article 1
Subject to full compliance with the restructuring plan as
(175) As to the fears of some competitors that the aid as such
notified on 4 February 2009 and to the conditions set out in
might be used for aggressive market behaviour, the
Articles 2, 3 and 4, the facility which Denmark granted to TV2
Commission would point out that there are no indi
and which was authorised as rescue aid by the Commission in
cations that the State aid itself entails a breach of other
its decision of 4 August 2008 is compatible with the internal
provisions of the TFEU or leads TV2 to automatically
market.
engage in anticompetitive behaviour.
Article 2
Conclusion
As of the date of this Decision, the rescue aid facility which
(176) The Commission finds that the notified restructuring
Denmark granted to TV2 and which was authorised by the
plan complies with the internal market according to
Commission in its decision of 4 August 2008 shall be
Article 107(3)(c) TFEU in conjunction with the Commis
repealed. None of the other aid measures notified by
sion’s rescue and restructuring Guidelines, subject to the
Denmark to the Commission on 4 February 2009 may be
following conditions.
implemented.

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EN
23.2.2012 Official
Journal
of
the
European
Union L
50/45
Article 3
Article 5
The compensatory measure proposed by Denmark that
Denmark shall inform the Commission, within 2 months of
prohibits TV2 from opening new television or radio broad
notification of this Decision, of the measures taken to comply
casting channels shall remain in place until the notified end
with it.
of the restructuring period, 31 December 2012. However, if
TV2 is allowed to raise subscription fees (end-user charges)
before that date, the obligation not to open new radio and
television channels ceases to exist as of that date.
Article 6
This Decision is addressed to the Kingdom of Denmark.
Article 4
The Danish Government shall instruct an independent financial
expert at the end of 2012 or early in 2013 to conduct an
Done at Brussels, 20 April 2011.
analysis of TV2’s capital structure, comparing it with the
capital structure of other relevant media companies. If TV2’s
capital structure deviates markedly from the median or
For the Commission
average of the relevant peer group, the Danish Government
shall adjust the capital structure at the meeting of the General
Joaquín ALMUNIA
Assembly in April 2013, in order to rectify any such deviation.
Vice-President

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Document Outline

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