Spain's Telecinco studies merger with broadcaster
Falling advertising revenues are forcing private television broadcaster Telecinco to seek possible merger with other TV operators.
MADRID – Spanish private television broadcaster Telecinco, which like most media groups is struggling with falling advertising revenues due to the economic slowdown, said Wednesday it is studying a merger with another broadcaster.
"We are studying all of this in depth ... and will hold conversations with other TV operators about it," Telecinco chairman Alejandro Echevarria said at the company's shareholders meeting.
His comments came less than a week after another Spanish television broadcaster, La Sexta, said it was open to a tie-up due to the dire advertising market.
Earlier this year, the Socialist government of Prime Minister Jose Luis Rodriguez Zapatero passed a law which eliminated a 5.0 percent limit on cross shareholdings at TV broadcasters in a move intended to ease sector mergers.
Italian Prime Minister Silvio Berlusconi's holding company Fininvest holds a 50 percent stake in Telecinco, which started broadcasting in 1990 as one of the first three private television channels in Spain.
Telecinco was the market leader in terms of audience share in Spain in 2008 for the fifth year in a row but its ratings have slipped this year due to the rise of younger channels and a recovery by state broadcaster TVE.
The broadcaster posted a 2008 net profit of EUR 211 million, a 40.2 percent drop, as advertising sales fell 11.1 percent to EUR 1.2 billion.
Shares in Telecinco closed up 5.03 percent at a session high of EUR 5.22, compared with a 2.01 percent rise in the Ibex-35 index of most traded Spanish shares.
AFP / Expatica