Spain's twin TV mergers for 2010

From David Del Valle in Madrid

Two TV mergers between Mediaset-controlled Tele 5 and Prisa-owned Cuatro and between Antena 3 and La Sexta will reshape the Spanish TV market as digital switch over is underway to meet the April deadline.

Tele 5 and Cuatro will be the first in the consolidation process with the imminent announcement of their merger giving rise to Spain’s largest TV channel in terms of audience ratings with a combined average share of around 23 per cent, below the legal limit of 27 per cent. The deal would also include the sale of a 20 per cent stake in Prisa’s pay-TV platform Digital+ to Mediaset giving the Italian group access to the Spanish pay-TV market, with around two million subscribers to the satellite platform. Prisa is also under pressure to raise cash for creditors to pay down an E5 billion debt that dwarfs its market capitalisation of EUR865.5 million.

Antena 3 TV and fourth-ranked TV station La Sexta are also close to finalising a TV merger that would create a TV company with a combined audience share of around 21 per cent. Both channels would manage and operate eight DTT channels and would take advantage of the first pay DTT channel in the market, Gol TV.

With these merger moves, the companies intend to weather the advertising storm at a time when the economic crisis is hitting the ad TV market with falls of up to 30 per cent until June to E1.192 billion against E1.706 billion the same period last year, according to Infoadex.

Last February, the government passed a law which eliminated a 5 per cent limit on cross shareholdings at television broadcasters allowing TV mergers.

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