laSexta hits economic problems
It seemed Spain’s new private national channel laSexta with all its sports rights would soon reach profitability but now it has been revealed to have big financial troubles.
The channel having not yet finished its football war with producer Sogecable (owner of Digital+ and Canal+) is now searching for quick money to be able to continue broadcasting.
Some days ago its owners travelled to Mexico because Mexican media giant Televisa owns 40% of laSexta. The trip was aimed at raising more capital and ended well – raising €130 million in capital extension concept, with €10 million coming by January.
LaSexta’s business plan will have to be modified. At the beginning this plan forecast investments of €500 million for a period of five years until the end of 2009 when they hoped profitability would come together with a share of 7%. So now this profitability will have to wait another year at least.
laSexta's capital extension regards financing new projects among among which are the renewal of the Spanish football League agreement rights. But in reality it is also related to the downturn of the advertising market. The Spanish advertising sector forecast a downturn of 175% next year in advertising incomes across the whole media sector.
At present laSexta has an average 6.25% of share and it hopes to raise this to 6.65% by the end of the year.
Another of laSexta's main shareholders is big Spain's TV producer Mediapro which also has big debts due to the purchase of rights of important sports events such as Formula 1 motor racing. This debt amounts to €2,500 million. However part of this amount is due in 2014 and 2015 meaning the company has time to make it profitable.