Digital+ price dependent on results

ñaki Ferreras

The final price the joint-venture of Spain's main telco Telefónica and French media group Vivendi is willing to pay for Sogecable's satellite pay-TV operator Digital+ will vary depending on the evolution of the pay TV operator. Vivendi has 60% in the joint-venture and one condition: the final price offered for the operator will reflect Digital+’s next reported EBITDA.

In the future contract between both parties - if finally signed – Sogecable’s owner Grupo Prisa promises a certain level of growth for Digital+. If this growth never happens, it will discount the agreed price.

For last year Digital+ had EBITDA of €367 million, 10.4% more than in the previous year. At the same time it lost 35,000 subscribers. Now the operator's EBITDA represents 35% of Prisa's final economic result.

Aside from having lost subscribers, Digital+'s main problem has to do with the soccer rights of Spain's soccer League for which it's been fighting with laSexta's Mediapro. Prisa has reported Mediapro's contracts with the soccer teams to competition authorities and the company is now waiting for the tribunal's response. The trial will take place next November.

Some market sources claim the joint-venture between Telefónica and Vivendi would never offer any more than €2,000 million, some €500 millon fewer than what the experts analysts consider plausible and almost half of what Prisa asks for.

However the talks between Prisa and the joint-venture are at a stand-still, waiting for Prisa to re-finance its €5,044 million in debt. According to some financial sources the company has already signed a pre-agreement to prolong one year longer a €1,950 millon loan.