Broadcasters are worried Spain, looking to make room for faster mobile phone networks, could force the closure of nine channels. The government said 3/29 it would implement a Supreme Court ruling to reverse its socialist predecessor’s decision to award licenses for OTA channels to various media companies in 2010 without a public tender.
The companies must now wait to hear what the decision means in practice, whether the channels will be closed or put up for tender, opening the door for rivals to buy them.
Spain’s Associated Commercial Television Union, which represents the affected firms, said it disagreed with the decision, adding the sector faced “unprecedented legal uncertainty”.
“The decision not only affects a sector in crisis that has lost 50% of its market over the past five years but also the development of value-added services for citizens,” it said.
The channels include right-leaning financial channel Intereconomia and MTV.
Market leader Mediaset Espana, part of former Italian Prime Minister Silvio Berlusconi’s Mediaset empire, could lose two channels, while Atresmedia may lose three, according to a Reuters story.
Vocento’s Net TV could lose two channels, as could unlisted Unidad Editorial’s Veo TV. Mediaset Espana and Atresmedia, which both merged with smaller rivals, have close to 60% of Spain’s audience share between them.
Both Mediaset Espana and Atresmedia saw their profit for 2012 more than halve as ad spending dried up in a recession that has left over a quarter of Spain’s workforce unemployed.
The television ad market shrank by 19% in 2012 and media companies do not expect ad spend to pick up until April 2014.
“We believe that this transition period will allow the government to negotiate with the operators a solution for this stalemate. Nevertheless, the two scenarios that we see on the table are the elimination altogether of these nine licenses or public tender for the licenses,” BPI analysts said in a note.
Vocento and Atresmedia would be hit most by permanent suspension of the licences, as Vocento would lose half its television offering and the three channels Atresmedia would lose represent “a significant percentage of audience share,” they said.
The government reiterated on Monday the decision to reverse the license awards was part of a process to move television frequencies to make room for 4G phone networks and the channels would continue to air during the transition process.