Green light for TV consolidation in Spain
February 25, 2009
From David Del Valle in Madrid
The Spanish Government has paved the way for consolidation in the commercial TV market following its decision to lift the 5 per cent limit in cross-ownerships of TV companies, opening the door to possible mergers between broadcasters at a time when networks are facing a dramatic fall in ad revenues (a 15 per cent fall in the last year) and tougher competition from new DTT channels.
The new rule will now allow two broadcasters to merge on condition that their average share does not exceed 27 per cent of the total share, and there remains at least three different private TV companies with a nationwide coverage and with a different editorial line. In addition, none of the TV companies will be able to operate more than two DTT multiplexes with a national coverage or one with Regional coverage.
Under these conditions a merger between Mediaset-controlled Tele 5 and Antena 3 TV would not be possible as they combined have an average share of more than 32 per cent. But, other merging combinations among the existing six private TV channels (Tele 5, Antena 3, La Sexta, Cuatro, Net TV and Veo TV) are possible. The most likely candidates could be Antena 3 TV and La Sexta as both have been exploring that possibility.
Broadcasters have welcomed the measure on the grounds that it is necessary “to financially strengthen TV companies that are being affected by the advertising downturn “.
As for public television, the new law states that national public television will not be able to have more than 25 per cent of the broadcast spectrum, 50 per cent in the case of Regional and Local TV channels.
Concerning non-European partners, the law lays down that those companies that do not belong to the European Union (also including Norway, Island, and Switzerland) will not be able to have more than 50 per cent of shares and will be obliged to meet the reciprocity principle (an investment in Spanish TV companies will follow a similar investment in the investor company in its country). This clause would prevent the Mexican Televisa from taking over La Sexta in which it currently has a 40 per cent stake.
The new legislation also imposes the obligation for the national DTT broadcasters to distribute their content through at least one satellite operator to complete the DTT coverage in those areas where terrestrial distribution is not possible.