Spanish TV deal approved
Fecha Lunes, diciembre 02 @ 09:01:53
Tema Media y Televisión :: Media & TV
| The Spanish government has approved the controversial merger between the country's two leading pay-television platforms after attaching conditions to address competition concerns.
The decision last Friday will clear the way for the merger between Telefonica's loss-making Via Digital arm and the larger Canal Satelite Digital business owned by Sogecable, a joint venture between Vivendi Universal and Prisa, a Spanish media company.
The "new" Sogecable would control more than 80 per cent of Spain's pay-TV market, with 2.8m subscribers and annual sales of €1.3bn ($1.29bn), dwarfing the country's nascent cable sector, the only real alternative in the pay-TV market.
The conditions include a freeze on subscription fees for four years and a ban on Telefónica marketing exclusive TV movies and football matches on other platforms, such as mobile telephones and broadband networks. The conditions also affect broadcast rights for first-run movies and football matches held by Sogecable.
Competition experts said the conditions were in many ways more lenient than those proposed earlier this month by the competition authority, which was not unanimous in support of the merger, as it would create a de facto monopoly.
Sources at both companies, however, maintained that the government's requirements were tougher than they had expected.
The government justified its go-ahead for the merger on the difficult conditions facing other European pay-TV operators. Quiero TV, a Spanish terrestrial digital platform, entered bankruptcy earlier this year.
But the argument has been rejected by the cable industry. ONO, one of Spain's two major cable groups, said on Friday it would consider ways to appeal against the government decision. It said the conditions consolidated Sogecable's control of pay-television and endanger cable industry.
The government's approval of the merger is being regarded as a political favour to Prisa and Telefónica, which control the two largest media groups in Spain, ahead of important municipal elections next year and general elections in 2004.
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