UPDATE 3-Polish TVN picks media insider as CEO in reshuffle
* Markus Tellenbach to replace Piotr Walter
* Walter stays on as deputy; CFO Burgess leaves
* Q2 net falls, but beats consensus
* Shares up 10 pct at 1217 GMT
(Adds new CEO quote, sales forecast, updates shares)
By Adrian Krajewski
WARSAW, Aug 13 (Reuters) - TVN TVNN.WA, eastern Europe's largest television broadcaster, replaced its chief executive with an industry insider from Rupert Murdoch's media empire on Thursday, after its ratings took a hit this year.
The Polish media group said its supervisory board member Markus Tellenbach, who also runs the supervisory board of German pay-TV operator SKY Deutschland PREGn.DE and once headed broadcaster SBS, would take over the top post from Piotr Walter.
Walter, who in 2001 took over the helm from his father, one of the group's founders, will stay as Tellenbach's deputy.
TVN also said its long-time chief financial officer was leaving for personal reasons and its head of programming would depart the management board, but would remain with the company.
By 1216 GMT, shares in TVN were up 10 percent to 14.95 zlotys, its highest in 10 months, after an afternoon surge, as Warsaw's main index .WIG20 rose 3.6 percent.
The broadcaster said the reshuffle was related to the group's growth following the controversial acquisition of a controlling stake in Poland's smallest digital TV platform, 'n', from TVN's main shareholder, ITI Group.
"I'm focused particularly on the 'n' venture," Tellenback said in a meeting with analysts.
Analysts said several other reasons could be behind the unexpected move, ranging from shifting attention to the growing satellite platform to closer cooperation with Rupert Murdoch's News Corp (NWSA.O), which controls SKY Deutschland.
TVN has been expanding its core television business, which also includes news and several other niche channels, and also controls Poland's leading Internet portal, onet.pl.
"TVN and onet.pl are no doubt good businesses, but if the group's results are to be made better, 'n' is the place," said Deutsche Bank Securities analyst Lukasz Wachelko.
The loss-making 'n' competes with market leader Cyfrowy Polsat (CPSM.WA) and a unit of France's Vivendi EAUG.PA.
"The new chief executive works in that branch in Germany and this is a positive change," Dominik Niszcz, analyst at Raiffeisen said. "SKY Deutschland is partly in the hands of News Corp, so this might be an indication of some cooperation."
Murdoch abandoned his previous investment in small Polish broadcaster TV Puls last year after it failed to boost its miniscule ratings.
Tellenbach plans to step down from SKY Deutschland's board by the end of this year, he said.
TVN, which has relied on its own productions and local formats of shows such as Dancing with the Stars and You've Got Talent to attract viewers, has been losing ground this year to unlisted rival Polsat and the public broadcaster.
Also on Thursday, TVN reported a smaller-than-expected drop in second-quarter net profit to 149 million zlotys ($50.2 million) versus expectations of 112 million.
Karen Burgess, the outgoing finance head, said the battered Polish advertising market, which shrank an estimated 13 percent in the first half, may be heading for a recovery.
"The worst is behind us, but it's hard to say whether the second half will be much better," said Burgess, who is leaving for personal reasons.
Burgess later told a news conference she expected second-half sales to rise, but only thanks to the pay-TV platform TVN began consolidating this year. ($1=2.971 Zloty) (Additional reporting by Agnieszka Barteczko, writing by Chris Borowski; Editing by Rupert Winchester and Simon Jessop)
