Mediapro losses mount, as do its challenges

Spain's giant TV and film producer laSexta's Mediapro has been loss-making since 2008, and the losses are beginning to mount up.

In 2007 it made a total net benefit of 9.8m, which had turned into a loss of 3.3m a year later. Between now and 2015 the company is committed to paying out a total of 2.5bn for exclusive sports coverage - or 80 times the company's EBITDA and 7 times the company's revenues.

Jaume Roures' production company has debts for E389 million with other companies belonging to the group. Then the financial downturn hit Spain, and Mediapro was forced to rethink the business plans of all its subsidiaries.

At the same time the government's calendar for the deployment of the DTT has slowed down the planned launch of Mediapro's sports-based pay-TV channel Gol TV.

The fact is that Mediapro had anticipated profits from its investments in soccer through Gol TV this year, but now with the Spanish Soccer League already running the company has been forced to resell its sporting contents to satellite, cable and DSL TV operators because pay-DTT is being received by such a small number of homes.

Mediapro's negative numbers also come from its stake in national private channel laSexta in which it holds through the society GAMP. LaSexta accumulative debts to December last year amount to 359 million and its shareholders have already invested 530.4 million over the past 3 years.

The only positive news in this sea of gloom is that Mediapro has signed an agreement with Mexican audiovisual giant Televisa, which has 40% stake in laSexta together with producing company Globomedia (belonging to Imagina holding company) by which the consortium will invest additional capital of 58.9 million during this upcoming year.