Everyone knows linear tv is in perpetual decline. Less and less people are watching traditional television — many do not even own a tv anymore. Streaming services have grown in popularity and taken market share. Germany’s biggest private radio and television conglomerate, RTL Group, is in the midst of a turnaround by pushing its own streaming service, but also by expanding sports live broadcasts. What might lead to raising eyebrows is the company has declared a dividend yielding 15%. Could this be the ultimate contrarian play?
Summary and key takeaways from today’s Weekly
– RTL is suffering from a declining core business, but the company announced a dividend yielding 15%.
– There’s a reason for this announcement investors should know.
– Under the hood, the challenged business is working on a turnaround to set itself up for the future by pushing sports live broadcasting and its own streaming platform.
As I do not like to be onboard of extremely popular themes, it should be of little surprise that I do not pitch any stocks of streaming-service companies.
And honestly, while it is well-known that “streaming is taking over”, the reality is more that this — consumer attention — is an extremely tough market. All providers are fighting for limited attention and ideally subscribers. With the exception of pioneer and market leader Netflix (ISIN: US64110L1061, ticker: NFLX), no other big streaming name has reached a level of high profitability. If at all.
But it’s not just watching tv or streaming movies and series. People’s attention is also grabbed by social media which Netflix in their annual reports is viewing as direct competition. In that sense, also podcasts, listening to radio and music, reading blogs like mine (or even going to the gym) in some form are competing in this market.
So, it’s more than just tv versus streaming — the competition has become larger.
More to choose from, but still 24 hours gross per day.
RTL Group (ISIN: LU0061462528, ticker: RRTL) remains Germany’s, even Europe’s, largest radio and tv conglomerate. The company is obviously not a growth rocket, but it is profitable, has net cash on the balance sheet, and ambitious expansion plans to remain relevant — and to operate from a position of strength.
With the latest results for the year 2025, RTL declared a dividend yielding 15%. Those who do not cover the company and its stock extensively, might wonder how that can be for a “dying business”.
Is this a highly contrarian idea with too little attention?
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per 08 April 2026 market close – since August 2022
TV + online = RTL
Everyone in Germany knows RTL — Radio Television Luxemburg.
It was Germany’s first private, or commercial, approved tv and radio station (in the early 1980s) to challenge the previous state monopoly of ARD and ZDF. Unlike the latter which some call enforced pay-tv (we need to pay for it a “Rundfunkbeitrag” or broadcast fee — whether we use it or not, with no legal opt-out option).
In contrast, RTL and its private competitors are mainly ad-financed.
On purpose did I use the word “conglomerate” in the intro, as RTL is not just a one-brand entertainment company. RTL is what they call themselves the “master brand”. The company as a whole is highly complex, offering a variety of different formats for different target groups.
The company is operating under various brands that not only span tv and radio (entertainment, news, children), but also reach written news (Capital, stern) and content production (Fremantle). All under RTL and non-RTL brands.
In Germany, RTL has a market share of almost 26%.
But they also operate in France, Hungary, and Spain. The other German-speaking countries like Switzerland and Austria have own dedicated derivatives where for example the content is the same, but ads are country-specific.
It would be wrong to view RTL just as a legacy private tv and radio station.
Given, this is still the bread and butter business, making it highly dependent on cyclical advertising revenues. But, I would go even a step further into the structural layer. Placing ads on tv has become a more competitive playing field as attention shifted to other channels, making it less attractive (though not unattractive) for ad buyers to be aired on traditional tv.
I wrote a similar thing in my weekly about the “Jim Cramer” stock (see here).
This is clear.
But RTL as a company has not been sleeping. RTL operates not just 52 tv channels and 40 radio stations, but has also established six streaming services across various European countries.
RTL+ is the key one. The core building block for the envisioned turnaround.
In a nutshell and no secret, the current situation is that legacy tv is declining.
Even though sales on the surface have been holding up relatively well, the truth is margins are in free fall. Accordingly, the entire company is under pressure, as linear tv ads are still the main source of income.
The mission — whether possible or impossible remains to be seen — is to milk this cow as long as possible, while in parallel RTL+ is being pushed aggressively through on-demand viewing options (often before they’re aired on tv), but also partially exclusive content.
This streaming service is growing like weeds, but so far it has not been profitable.
Obviously, growing a user base and spending on content come at a cost. But as we will see further below, progress is noticeable. It is far from a failure.
To finish the top-down overview, this portfolio transformation is accompanied by several different partnerships and bundles with other services. This is insofar interesting as in the past, there were no bundles between international tv stations. Tv was more a local type of thing — the setup was entirely different.
Today, RTL+ is competing with international players, while in the past, RTL and its sister channels did not have to win over Fox, CNBC, CNN, ESPN, etc.
The solution: bundles to make it easier for consumers to sign up for many-in-one baskets, instead of being overwhelmed by so many different options to choose from.
This might sacrifice some margins and sales potential. But I see primarily two advantages that outweigh that: better to have some sales instead of no sales, and much less friction for the consumer. The cost base is rather fixed, and scaling with more users. Content obviously still needs to be produced, but margins are higher when say 1,000 people use a service versus just ten. Costs do not rise in the same proportion.
And depending on what one wants to watch, it is possible that exactly the desired format is not available on the signed-for streaming service. Having five or six such subscriptions to appease everyone is annoying. It is a hurdle that should not be underestimated.
Hence these bundles make sense to lower the bar for a sign up.
That’s why size and scaling rapidly are important. First, build your base and then take care of profitability.
So, where does RTL stand today and what are the targets?
Let’s check the last full-year results. Of course, the highlights overview reads very promising. Streaming continues to grow dynamically which is true. In the last quarter, it is said to have been “near break-even”, while this year it is expected to finally reach profitability.
The discussed partnerships were also mentioned, together with ongoing market share gains. But two other so far not mentioned aspects stand out: the planned and ongoing acquisition of sports pay-tv channel Sky Deutschland, and the dividend of 5.50 EUR per share.
Sky Deutschland is known here for broadcasting primarily football (soccer) from various competitions like Bundesliga, Premier League or the Champions League, but also other sports like Formula 1.
This is the second pillar RTL is pursuing — live sports.
In my view, this makes sense as sports rights often are exclusive, justifying a premium fee and lowering ad-dependency. How well this will be integrated and whether a weaker economic environment will be supportive, remains to be seen (subscriptions often can be cancelled on a monthly basis).
If the Sky deal is approved, this move would make RTL Group the clear number three of the streaming names in the DACH region, so it’s not a small add-on.
On the other hand, regarding a weaker economic environment, such services are much cheaper than going out, so there’s a good chance RTL will have success with this strategy while tight budgets will be balanced through cutting and saving on other things.
And secondly, RTL proposed an unusually high dividend.
5.50 EUR are raising eyebrows, given that the share price is around 36 EUR for a yield of around 15%. RTL has always paid out most of its earnings in dividends, so a high yield per se is not unheard of.
But this time, it is the result of sale proceeds from the Netherlands business. It was sold last year for around a billion EUR, and these proceeds, together with the regular dividend from business results, are being distributed.
From the screenshot above, we can see that RTL has been really busy with selling many businesses that they no longer viewed as core.
In total, proceeds were 2.7 billion EUR — resulting in juicy dividends for shareholders.
So, the current payout follows a known pattern.
Zooming in a bit into the financial results of 2025, it becomes obvious that the business environment was (and likely still is) very tough. Sales were down 3.8%, and even —4.3% on an organic basis. Their operating margin yardstick EBITA (without “D”) dropped 8.3%, and margins from 11.5% to 11%. Even the adjusted version fell.
The most interesting part is now the last set of columns shown below.
Net income, or total group profit as they call it, almost doubled. Don’t get too excited as this was largely driven by the sale proceeds from the Dutch business. If you look closer, you’ll see that profit from continuing operations was just a tiny 72 million EUR — a margin of a little more than 1% — so just-above break-even.
Obviously, RTL continues to invest heavily into pushing its streaming service, but this does not deny the fact (or make it better) that the core is rapidly melting away.
There were multiple one-time costs and special items in it, but nonetheless, at some point the market will want to see true profitability on a sustaining basis. There’s no way around this. Especially, as the dividend is determined based on adjusted net profits.
Which leads us back to streaming.
RTL+ crossed 8 million subscribers last year (7 million in Germany). The jump is noticeable, so interest seems to be really there. Revenues followed in lockstep, breaching through half a billion EUR. The profitability trough, respectively investment peak, seem to be behind.
For 2026, another million more viewers are targeted to reached 600–650 million EUR in sales and, finally, profitability. However, you can read between the lines that I am not really enthusiastic — profitability on an adjusted EBITA basis.
In other words, there’s still plenty to do, to prove, and to achieve.
Even if they reach this adjusted EBITA target — which would be great and testament to a working concept to bring the company forward — these tiny 25–50 million EUR compare to multiple times that for the whole company.
So, we are effectively still a few years away before streaming could be a meaningful profitability pillar. On the quarterly-basis overview, we can see that sales were less than 10% for streaming inside the group last year.
Full-year and full-company EBITA was 661 million EUR in 2025 with a target of 725 million EUR for 2025.
The road is long and rocky.
It might be a bit surprising, but the setup is at least enough for me to have the stock on my watchlist, as it is seen as a for-dead company. Of course, it is not without risks — profitability in the core linear business could erode quicker than thought. However, RTL still remains profitable, and the company has modest net cash on the balance sheet. So, a debt and liquidity crunch won’t break it.
It is definitely not a hopeless case.
But how to value RTL Group? The market cap is 5.5 billion EUR.
The stock has been under pressure for years, but managed to stage a mild comeback since late 2024 when it dropped massively in the double-digits on one day after weak and declining results. Since then, however, the stock made up a good chunk of lost ground.
And, RTL reacted positively to the planned Sky acquisition.
On a price to sales basis, RTL trades on the lower end of the historical range.
But for now, this seems warranted, given the sector’s challenges and vast competition. If RTL manages to establish its streaming service as a serious contender, and shows at least a stabilization in margins, I can absolutely imagine higher multiples again.
But for now, I think the company is in a show-me-first position.
A PE ratio is utterly useless at this point.
Maybe cash flow? Not really convincing either. After subtracting Capex and some recurring other financial items, FCF for shareholders is currently somewhere between 300–350 million EUR.
That’s a multiple of more than 15x which I am not willing to pay.
At 10x, or ideally a bit below that, we could talk.
Watchlist.
Conclusion
RTL is suffering from a declining core business, but the company announced a dividend yielding 15%.
There’s a reason for this announcement investors should know.
Under the hood, the challenged business is working on a turnaround to set itself up for the future by pushing sports live broadcasting and its own streaming platform.
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