The Korea Communications Commission (KCC) announced that it will examine JTBC's financial difficulties during the re-approval process.
At a press conference on June 15 marking six months in office, KCC Chairman Kim Jong-cheol stated, "We are currently monitoring JTBC's financial crisis. From what we have confirmed so far, it is primarily a liquidity crisis."
He added, "JTBC is subject to the re-approval process, and an important evaluation criterion in this process includes financial assessments. We will take this into account during our review."
On June 14, NICE Investors Service downgraded JTBC's long-term credit rating to CCC and its short-term rating to C. The credit rating of the JoongAng Ilbo was also lowered to long-term BB- and short-term B-.
NICE assessed that JTBC's liquidity risk has significantly increased. It noted that the repayment of approximately 20 billion won in loans has not been made, and funding conditions have worsened.
The liquidity crisis at JTBC is attributed to a combination of a stagnant broadcast advertising market and the burden of content investment. The decline in TV advertising revenue has weakened cash generation, while the accumulation of debt from securing broadcasting rights for major sports events like the Olympics and World Cup, along with content production investments, has deteriorated its financial health.
As a result, the overall financial burden on the JoongAng Group is also increasing. According to NICE, the total debt of the JoongAng Group reached approximately 2.8 trillion won at the end of last year. Its subsidiary, Content Lee JoongAng, is facing additional financial burdens due to share acquisitions and investment repayments, along with the upcoming maturity of convertible bonds at the end of this month.
NICE pointed out that "the level of debt is excessive compared to cash generation capabilities."
* This article has been translated by AI.
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