PRISA needs more time… more cash… and new ideas

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 PRISA is the biggest and most influential Spanish media group. It has set the agenda and it has dominated the political debate in Spain since the end of the seventies. But now it is feeling the pinch.

Of course, part of the problem comes from the present crisis: consumer spending is low and advertising expenditure decreased last year 11% in Spain. But on top of that, PRISA has a debt of 5.500 million euros, as a result of its takeover bid for Sogecable. In this difficult context, the Spanish government has approved the launching of new pay TV channel (Gol TV) which will broadcast soccer and other sports. Sogecable has been forced to reduce its fees and therefore it will generate less cash flow.

This week, Juan Luis Cebrián, managing director of PRISA, announced that the media conglomerate has agreed a deal worth around 247 million euros to sell 25 percent of its book publishing arm, Santillana. The deal gives some time to PRISA managers but it does not solve the problem. The company should sell some of its most valuable assets. A new strategy is also needed. Is it time for new leadership at PRISA?

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