Spain’s DTH platform has been in play ever since the merger of Canal Satelite Digital with rival Via Digital in 2003. A constant parade of shareholders has seen the departure of Canal+, though the premium channel continues to license its brand in Spain and other markets where it once held equity, and former Via Digital shareholder Telefonica.
In early 2008, Digital+ was acquired by Prisa as part of the purchase of Sogecable, the media business that included both Digital+ and the free-to-air channel Cuatro. It soon emerged that Cuatro was the prize, and with Prisa anxious to fill a €650 million shortfall, it was prepared to let go of Digital+ and its 2,061,000 subscriber base.
Prisa has said that it expects to receive binding bids for Digital+ by the end of November, once bidders on its short list have completed the process of due diligence. The sale itself is not expected to take place until the first quarter of 2009. With so many companies supposedly ruling themselves out it might be a surprise if anyone bids at all, but in reality the statements are likely to be a matter of posturing.
The runners and riders
BSkyB
Separate from its parent company News Corp, a BSkyB bid would be the first acquisition of a pay-TV company by the UK platform. Speculation has also surrounded unfounded local media talk that Sky might be preparing a package of English language channels for the sizeable British ex-pat community in Spain. The recent $600 million (€477 million) bond, issue together with healthy cash flow, means Sky has much of the €2.5 billion required to make the purchase, but like Rupert Murdoch, Sky CEO Jeremy Darroch has denied any interest in making a bid.
News Corp
News Corp has been on the acquisition trail, recently adding the German pay-TV platform Premiere to its European interests. The privatisation of technology company NDS and the sale of East European television interests has contributed towards a $5 billion warchest to fund new purchases. However, News Corp chairman Rupert Murdoch ruled himself out of the process in November.
Ono
The Spanish cable TV operator ONO potentially has enough concerns in its core business. Earlier this month the company appointed Jose Maria Castellano as its new chairman, replacing Eugenio Galdon, the cablenet’s founder and a significant shareholder. The cablenet is also laying off 30% of its 4,300 workforce in a bid to face down the current economic crisis.
Orange
A competitor to Telefonica both for Digital+ and the IPTV business, Orange has already announced plans for a Spanish DTH platform along the lines of its recently established business in France. Like Telefonica, Orange has a triple play offer in place with Digital+, which allows it to offer its broadband internet and telephony services alongside the television offer.
Carlos Slim
Reputedly the second richest man in the world, Carlos Slim is a 68-year old Mexican Media magnate who controls the Teléfonos de México (Telmex), Telcel and América Móvil companies. He was linked with Digital+ in May when he was involved in talks between Prisa CEO Juan Luis Cebrián, the former Spanish Prime Minister and Slim advisor Felipe González. He later said he was not interested in taking a stake in either Digital+ or Prisa itself.
Telecinco
The 20-year old commercial TV broadcaster is the second leading channel in Spain. Originally linked with a bid for Digital+, it later said that the conditions for the bid were not right. The company is 50.1% owned by Mediaset, the Italian media company controlled by the former Italian prime minister Silvio Berlusconi. Mediaset itself has pay-TV interests in Italy as the operator of the Mediaset Premium pay-TV platform over the country’s DTT system.
Telefonica
Former shareholder Telefonica is seen as a potential purchaser of Digital+, not least as a defensive move to prevent other operators from entering the market, but also because of the arrangement it has with Digital+ to sell its telephony and broadband services. It already has experience of Spanish DTH, both through Digital+, and its earlier venture Via Digital. Most recently, Telefonica has begun to build its IPTV service, which had 589,551 subscribers at the end of the third quarter, and is one of the reasons for a general plateauing in subscriber levels elsewhere. In September, Telefonica’s chief executive said it was not yet the right time to make a decision.
Vivendi
It’s a case of back to the future for Vivendi, which largely withdrew from the international pay-TV business following the acquisition of Canal+ Group in 2001. The company is now regularly linked with the purchase of stakes in international pay-TV business and Digital+, which still broadcasts channels under the Canal+ name, is no exception. Spanish telco Telefonica is a potential partner in any bid.
