After a long absence, SRG is returning to the capital market. On Monday, it held investor meetings under the lead management of UBS and ZKB. The seven-year, 100 million francs bond is set to be launched on Tuesday and will be used to refinance short-term liabilities. SRG last repaid a bond in 2008.

What is particularly interesting is how ZKB and Fedafin evaluate the financial standing of the country’s largest media organization, which is widely known to the public and generates annual revenues of around 1,5 billion francs with more than 7'100 employees.

Erosion of Traditional Media

Organized as an association, SRG fulfills a public service mandate from the federal government, based on the Swiss Constitution, the Radio and Television Act with its implementing ordinance, and the federal concession. It is financed primarily through mandatory broadcasting fees.

ZKB rates SRG at BBB (stable outlook). Credit analyst Carolin Pompetzki points to the rapidly changing patterns of media consumption, which have led to a decline in the importance of traditional media such as SRG, reflected in falling reach on its linear channels. «The 2026 referendum on the halving initiative will show how strongly SRG is anchored in society,» Pompetzki noted, referring also to the ongoing transformation program Enavant SRG SSR with its savings targets.

Halving Initiative Compatible with Rating

SRG does not pursue profit and aims to break even annually, but in recent years has generated sufficient operating cash flow to finance most of its investments on its own. Even if the halving initiative were to pass, the BBB rating is deemed appropriate, given transitional periods, adjustments to the public service mandate, and potential property sales, according to ZKB.

However, the BBB rating is not based solely on SRG’s own strength. ZKB assigns a standalone rating of only bb+. «Given SRG’s closeness to the state, we assume an implicit guarantee with a ‘moderately high’ probability of support from the Swiss Confederation, which carries a AAA rating. This lifts SRG’s rating by two notches to BBB.»

Strengths and Weaknesses of SRG

Fedafin, by contrast, assigns a significantly stronger rating of A+. The agency bases its assessment on the following strengths and weaknesses.

Strengths:

• Constitutional public service mandate
• Competitive advantage through license fees
• Strong market position across all four language regions
• High relevance for public opinion-making and, to some extent, systemic importance
• Very high hidden reserves in its real estate portfolio, valued at 451 million francs at the end of 2024 (excluding projects under construction)

Weaknesses:

• Increasing liberalization of the media market
• Ongoing pressure on fee revenues (halving initiative)
• Restrictive regulatory framework limiting responses to the growing multimedia market (e.g., Netflix, Amazon, Apple, Disney
• Major challenges in implementing innovation and transformation simultaneously
• Potential strong pressure on profitability from 2027 onward, when the steepest fee reduction would take effect

Fedafin agrees with ZKB that the likelihood of government intervention to stabilize SRG in a crisis is considerable. However, Fedafin applies an  «upgrade» of six notches, which helps explain why its rating is four levels higher than ZKB’s.

Diverging Views Not Negative

Fedafin also seems to implicitly assume a higher probability that government support may be needed. The agency states that adoption of the halving initiative would result in «a major restructuring and possible adjustment of the concession» — a more dramatic outlook than ZKB’s.

The fact that the two rating agencies’ assessments of the same borrower diverge so significantly is not necessarily negative. Rather, it can be seen as a healthy pluralism of approaches and judgments within the Swiss rating market.