[tv-rsl-l] Breaking News - Einstein Group buys out LBG

[Michelle McGuire]

+ Einstein Group News Release +

10 May 2002

Einstein takes initiative in local TV

Einstein Group, the broadcaster and  multi media group that owns the
international television channel, einstein.tv and media rights in the
Classical World Chess Championship, is looking to build on demand for local
TV news within the UK, having acquired a 51% shareholding in Brendart Ltd on
10th May 2002. Brendart Ltd is a company that has bought certain assets of
the Local Broadcasting Group in Administration Ltd (LBG), including 100% of
the share capital of City TV and Herts TV, together with licences originally
acquired by LBG. 

Einstein¹s partner in Brendart Ltd is an American consortium that has seen
how successful local TV has been in the United States and will now bring US
investment and expertise into the UK¹s local TV market. The American
Consortium has agreed to underwrite the working capital requirement for the
next 12 months. For Einstein this is a great opportunity to build on its
broadcasting base, fully utilise its video server based transmission system
and exploit its extensive production expertise.

LBG was the owner of 32 local television licences and licence applications
that had been awarded to them by the Independent Television Commission
(ITC). The Local TV licences that have been acquired are for towns and
cities in the Home Counties, Essex/Suffolk, Cambridgeshire, Bedfordshire,
Hertfordshire, Scotland and the South West of England. They offer viewers
programming of local interest via their terrestrial television set and
aerial with no additional expense and no need for the purchase of a
satellite dish, cable or subscription.

Einstein is confident that this is a great opportunity to produce
significant revenues and shareholder benefits for the Group, despite the
fact that LBG were unable to capitalise on the opportunity to make local
television work. Einstein believes it is able to exploit this opportunity
because of its low operating costs, the fact that it is flexible enough to
be able to immediately respond to the desires of the marketplace and it has
the technical and commercial skills to turn the opportunity into profit.

Steve Timmins, CEO of Einstein Group, who was an executive producer in
regional ITV in the early 1980s says: ³Mainstream national TV may be in long
term decline, but the demand for local television services is increasing and
we have been able to enter this market at a very sensible price. In the USA
local UHF stations generate 25% of total television advertising and our
American partners believe that this is an opportunity that the UK market has
missed.² 

Timmins points out that in the recent ITC report, ŒTelevision: The Public¹s
View¹ there is no genre of programming more popular than local and
regional news: 88% of all viewers interviewed expressed interest in such
programmes. ³Our own market research in one of the franchise towns revealed
that a staggering 74% of the interviewees watched the local TV service on a
daily basis.² He added: ³The demand for local news and information is also
shown by the fact that 84% of the UK population reads a local or regional
newspaper.² 

Einstein engineers, having already developed their own unique,
custom built, server based transmission technology for Einstein Group¹s
einstein.tv service, will consequently be able to edit and service locally
produced programming and advertising from one central location. This will
mean substantial amortisation of costs across management, sales,
advertising, website operations and engineering.

In order to facilitate this, Einstein intends to pull its transmission and
post-production headquarters back from its current European base in Berlin
to a base in Bristol (one of the TV franchise areas and key office of the
Group). This base will be the transmission and post-production hub for the
international channel and for the local television franchises.

Steve Timmins continues, ³Einstein Group now has a firm base from which to
create genuine value. The TV industry has seen the demise of most of the
small, national digital TV channels, but Einstein¹s position has strength
because its core businesses include an international TV channel, a
terrestrial TV niche business and TV and Internet sports I.P. rights.


-Ends- 

Notes for Editors
 
For further information please contact:
Einstein Group Press Office
Zena Howard: +44 (0) 7989441293
zena_howard at einstein.tv
www.einstein-group.tv


In 1996, the ITC allocated Restricted Service Licences (RSL) to private
companies. The RSL was introduced, as a new form of television licence by
the Broadcasting Act of 1966, allowing smaller, privately owned broadcasters
to operate alongside the major networks. Consumers do not have to subscribe,
and can receive the channel on a normal TV.

Einstein Group plc, founded in 1999, is an international multi-media group.
It floated on the Alternative Investment Market (AIM) of the London Stock
Exchange in March 2000 and is listed in the Media and Photography sector
under the FTSE Actuaries Classifications. It includes Einstein Consulting
which offers external clients a wide range of strategic and Œhands on¹
consultancy services in the areas of channel management, production
technology, marketing & PR, and new media business development and Einstein
Entertainment Ltd, the programme division of Einstein Group plc, which
produces output for the UK and overseas.

Einstein Group¹s recent acquisition of Intellectual Leisure Ltd sees it set
for an exciting future in game and education base media. The deal gives
gives Einstein Group a contract with World Chess Champion Vladimir Kramnik
until 2005 and all contracts relating to the forthcoming Chess World
Championships. It also gives the Einstein Group brand a potential edge over
any other educational based, digital TV channel rivals. There are two major
areas of synergy between Einstein Group¹s digital science and technology
platform for World Championship Chess matches, enhancing the potential for
sponsorship funding, advertising and subscriptions. Intellectual Leisure Ltd
provides Einstein with intellectual property rights, high profile sports
content and an intellectual gaming feature that can exploit spread betting
and other gambling activites in a multi media environment.

World Chess Championships: The next World Chess Championship will be held in
2003. The venue has yet to be confirmed. Eight of the world¹s best players
have been invited to participate in the Candidates¹ Tournament in Dortmund
(Germany), in July 2002. The winner of this tournament will be the
Challenger in the World Chess Championship final in 2003, playing Vladimir
Kramnik. $800,000 of sponsorship has already been secured for this cycle.

Man vs. Machine Competition: For the first time since Garry Kasparov
spectacularly lost to IBM¹s Deep Blue in 1997 the World Champion Vladimir
Kramnik will play the world¹s best chess program Deep Fritz, for a fully
sponsored $1m prize fund. The ³Brains in Bahrain² tournament will take place
in October 2002, under the patronage of the Emir of Bahrain and the Bahrain
Government Youth and Sports Organisation.