JTBC's success overshadowed by high production costs, exceeding rivals by 1.5 times

JTBC, currently undergoing corporate rehabilitation due to liquidity problems, invested substantially more in its television programming than other general programming channels up until 2024. This aggressive investment strategy, which fueled the success of popular shows like 'Please Take Care of My Refrigerator,' ultimately failed to generate adequate returns.

According to the 'Announcement of Broadcasting Business Operators' Financial Status' published annually by the Korea Communications Commission, JTBC's expenditure on broadcasting programs, including production and acquisition costs, amounted to 261.9 billion won in 2024. This figure is up to 1.5 times higher than the production costs of other general programming channels. For comparison, Channel A spent 168.1 billion won, MBN spent 172.5 billion won, and TV Chosun spent 243.3 billion won in the same year. JTBC has consistently increased its production budget over the past decade, surpassing 200 billion won in 2017 and steadily growing thereafter.

However, the substantial production costs did not translate into proportional profits. JTBC's broadcasting revenue in 2024 was 281.7 billion won. After deducting production and acquisition costs, the remaining profit was minimal. When other operating expenses like selling, general, and administrative costs were factored in, the company recorded a net loss of 42.7 billion won for the year. The previous year, 2023, also saw a net loss of 71.6 billion won on broadcasting revenues of 304.7 billion won and broadcasting expenses of 298.9 billion won.

The financial strain is exacerbated by the shrinking broadcasting advertising market, a consequence of the growing dominance of global online streaming services like Netflix. Furthermore, significant investments in broadcasting rights for major sporting events such as the Olympics and World Cup, estimated at $500 million (approximately 700 billion won), have likely increased the company's debt.

JTBC and its parent company, JoongAng Group, announced 'maturity default' on four bond issues on June 15th and 16th, respectively. This signifies that creditors can demand repayment of loans before maturity due to the companies' deteriorating financial health. While JoongAng Group stated it would discuss repayment with the main creditor bank given its ongoing corporate restructuring process, JTBC has not yet issued a formal statement. A hearing for JTBC's rehabilitation proceedings is scheduled for June 23rd, along with hearings for other JoongAng Group affiliates.