Four under the 'Telecinco model'

A strong commitment to its own production and spaces co-produced by participating production companies will be the business model that Telecinco will export to Cuatro in the coming months. Coinciding with the company's Shareholders' Meeting, Paolo Vasile confirms the group's intention to launch a fourth channel in “the fairly near future.”

Coinciding with the Shareholders' Meeting held last week in Madrid, the president of Telecinco, Alejandro Echevarría confirmed that in order to make the operation with PRISA profitable, the chain will apply its "business model" to Cuatro based on a strong commitment to its own production and those co-produced by participating production companies.

During the Meeting, Echevarría also showed his satisfaction with the reduction in the obligation to invest in Spanish cinema on the part of television stations that the new General Audiovisual Law has imposed, going from 5 to 3 percent, although he assured that commercial television stations will continue their efforts so that this measure is completely eliminated, even more so "at a time when commercial television stations are in losses or have reduced their profits."

For his part, the CEO of the chain, Paolo Vasile, although he did not confirm the group's intention to put eight channels on the air, corresponding to the two multiplexes that it will operate as a result of the merger with Cuatro, he did announce that in “a fairly near future” Telecinco will launch a fourth channel. With regard to the channels that Sogecable currently has on DTT, Vasile commented that different options are being considered, including the possibility of 'renting' the spectrum of a channel to PRISA, such as CNN+, thus preserving its editorial management.

Advertising investment

Fearing that the suppression of advertising on TVE would mean a transfer to other media, Telecinco has confirmed that in view of the results of the first quarter of the year it can be stated that one hundred percent has been preserved in the television medium, even recognizing Telecinco's Advertising CEO, Giuseppe Tringali, that billing has increased slightly so far this year. Tringali was also optimistic about a hypothetical rebound in investment in the coming months due to the impact of major events such as the World Cup in South Africa.

Regarding the consequences of the analog blackout, Paolo Vasile assured that at Telecinco they have not perceived any notable change in trend, nor a sharp fragmentation in these first weeks of digital television after the analog signal was turned off.

Signature of the framework contract

Telecinco and Prisa, together with Mediaset and Sogecable, gave the final green light to the integration of Cuatro and the acquisition by Telecinco of 22% of Digital+ at the end of last week, after the signing of the framework contract aimed at establishing the procedure, calendar and other terms of the agreement announced last December. The closure of the process is subject to a series of conditions, including its approval by the Antitrust authorities.

With the aim of financing the operation and strengthening its balance sheet, Telecinco plans to carry out a cash capital increase of 500 million euros with preferential subscription rights. At the end of the process, Prisa will receive newly issued shares of Telecinco (non-monetary increase) which, after the monetary increase, will be equivalent to 18.337% of the share capital; as well as 491,128 million euros in cash.

Other agreements have also been included in this framework contract, such as the purchase and sale of Digital+ shares, between Telecinco, Prisa and Sogecable; the integration contract between Telecinco, Prisa and Sogecable; and the Digital+ shareholders agreement between Sogecable, Telefónica, Prisa, Telecinco and Digital+.