2010: A Year of Mergers in the Spanish TV Market?

by

2009 has been a year of dramatic changes in the Spanish television market: a new legal framework, a decrease of advertising income close to 24%, and a more fragmented audience. Other issues have been less innovative: during the last 12 months we have seen again several controversies about the quality of programming and about the role of the public television. Also, in spite of the launching of new entertainment substitutes, TV consumption remains high.
Spanish television companies are feeling the pinch because of both the advertising decline and the launching of new channels. Only two operators -Telecinco and Antena 3- will be profitable in 2010 and their margins probably will be below 12% of their income.
In this context, mergers and acquisitions seem inevitable: a majority of competitors are not profitable and the law allows consolidation of companies with a limit of 27% of audience’s market share.
What are the barriers for implementing such deals? Firstly, the small TV companies have big debts. And secondly, two merged companies only can have one boss: that last fact will be the main obstacle for consolidation of companies in the Spanish TV market next year.

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