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IP/03/655

Brussels, 08 May 2003

Commission closes its probe of Audiovisual Sport after Sogecable/Vía Digital merger

The European Commission has closed its investigation regarding the acquisition of broadcasting rights to Spanish football by Audiovisual Sport (AVS) after consulting interested third parties. This follows significant changes brought in the past by the joint venture between Telefónica and Sogecable to their jointly-held rights which had the effect of granting access to football by new cable and digital terrestrial television operators which have also been let free to set their own prices. The decision of the Spanish competition authorities on the merger of the two pay-TV platforms in Spain, Sogecable and Telefónica's Via Digital, also created the conditions for a more competitive exploitation of the country's football rights. It should be noted that following the merger, Sogecable has agreed to buy the stake of Telefónica in AVS, therefore, terminating the agreement notified to the Commission. The Commission will continue to follow carefully the behaviour of the companies concerned as well as others in other countries in the fast-changing media markets.

Sogecable and Telefónica de Contenidos, a subsidiary of Telefónica formerly known as Admira Media, had notified an agreement to the Commission in which they pooled forces to acquire and exploit the broadcasting rights to Spanish First League football matches for 11 seasons ending in 2009 through their Audiovisual Sport joint venture.

The Commission quickly took the view that the agreement amounted to an unacceptable monopolisation of the rights by the two main TV platforms for a very long period of time and warned, in 11 April 2000, that it would impose fines unless the accord was terminated or significantly modified (see IP/00/372).

Following this, Telefónica and Sogecable announced that they would give entrants in the Spanish cable and digital terrestrial television markets access to the football rights and accepted that such competitors would be free to set their own pay-per-view prices (see IP/00/1352 ).

Although this development immediately exerted a downward pressure on TV subscription prices a few issues remained.

However, the Commission's discussions with the parties were suspended by the announcement, in 2002, of the full merger between Vía Digital and Sogecable.

This merger was authorised by the Spanish authorities in November 2002, subject to conditions that were further specified in a detailed implementation plan recently presented by the parties to the Spanish authorities.

The conditions set on the merger abolish the renewal options held by AVS on the football rights, guarantee third parties' access to the rights under fair, reasonable and non-discriminatory conditions and establish that the merged entity will not have exclusive use of the new media rights. Access to the football rights will be subject to an arbitration mechanism

It should be noted that following the merger between Sogecable and Via Digital, Sogecable will acquire the stake of Telefónica de Contenidos in AVS. AVS was originally set up as a joint venture between Sogecable and Telefónica (with 40% each) and TVC, the Catalan public broadcaster (20%). As a result of the merger, it will be owned 80% by Sogecable and 20 % by TVC. The agreement between Sogecable and Telefónica de Contenidos and which had been notified to the Commission will therefore be terminated.

Before closing the case, the Commission consulted the companies that had complained about the AVS behaviour as well as other parties concerned.

Background

Sogecable is a joint venture between by Prisa -- Promotora de Informaciones S.A., the Spanish media group that publishes "El País" and "Cinco Días" -- and French pay-TV company Canal+. It is active in terrestrial television (Canal+ analog) and direct-to-home satellite pay television services (Canal Satélite Digital) as well as the production and distribution of films, the acquisition and sale of sports rights and the provision of technology services.

Vía Digital offers pay-TV via satellite in Spain and is controlled by Telefónica through Telefónica de Contenidos. The remaining capital is divided among institutional shareholders, mainly TV operators (Televisa, Canal 9, Direct TV, TVG, TVC, Telemadrid).


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