Tvw Case

TVW Case Report

Business Opportunities:

* TVW to Maintain presence in South Poland with DBG and existing partnerships with Efekt and Realbud would be diluted

* TVW can partner with Bertelsmann, maintain other partnerships and potentially lose licensing agreement in Poland but expand regionally in other parts of Europe

Current Problems:

The primary problem that TVW faces is running out of cash. They are currently facing a liquidity crisis with debt coming due. The two owners, Efekt and Realbud, have language limitations and culturally, they are not used to the time pressures of western business. They have also mismanaged their relationship with potential foreign partner, Disney, when they were considering becoming a content partner. That said, it seems TVW could raise money if Efekt and Realbud are willing to act rationally. They should prefer to have an operating business, which they could do with Bertelsmann. From Hurley and TVW’s perspective this is less ideal than an investment with DBG, which allows them to operate without the cultural constraints.

TVW also faces a few other problems since they are developing in a new market and need to have operations up quickly to maintain their advantage. Disney or Bertelsmann are great first steps in terms of content but TVW will need to find more willing investors/partners.

Root Cause of Problems / Scarce Resources:

TVW lacks capital in order to continue its operations by meeting its upcoming debt obligations and in order to develop a strategy to increase its share of advertising and viewer markets. The company's inability to raise this capital however lies fundamentally in the fact that the current shareholders represented by Efekt and Realbud are creating difficulties in raising capital from potential investors. Efekt and Realbud are directly influencing any potential deal conclusion by obstructing the deal process and changing the deal terms as in the case with Disneyland. In addition, these...