In a decision that will directly affect both parties in Spain's pending pay-TV merger, the Spanish government has announced that it will prohibit companies from owning shares in more than one broadcaster at the national, regional and local levels.
Grupo Prisa and Telefonica - the backers, respectively, behind set-to-merge digital satellite platforms Canal Satelite Digital (CSD) and Via Digital - will be affected by the reform of an existing law. The reform was announced this week by Science and Technology Minister Josep Pique and should be passed on December 13, the same cut-off date for the government's decision concerning the merger.
Pique told local press that the reform aims "to avoid that a network of local broadcasters across the nation could become an alternative to a national channel," for instance, by offering the same block programming. He said it had "nothing to do" with the digital merger.
Julio Veloso, a lawyer with SJ Berwin in Madrid, similarly argued that "the conditions [of the reform] are quite do-able" for both Prisa and Telefonica. He further suggested that the changes would not be particularly advantageous for hard-pressed competitors led by cable companies Auna and Ono, the most outspoken critics of the merger to date.
Prisa - backer of Sogecable, which owns CSD - participates in national broadcaster Canal Plus (which broadcasts partially free-to-air) as well as dozens of local stations through holding Localia.
Telefonica - which will become an equal shareholder in Sogecable alongside Prisa and Canal Plus France if the merger goes through - would be required to either sell off its new stake in Sogecable or, more likely, its 47.4% share in national free-to-air broadcaster Antena 3.
Another significant multimedia group which would be affected by the new reform is Grupo Correo Prensa Espanola, which owns 25% of free-to-air broadcaster Telecinco and has shares in multiple local broadcasters.