The planned merger of Spain's two leading pay-TV platforms, Telefonica-owned Via Digital and Sogecable-backed Canal Satelite Digital (CSD), took one step further towards reality after Friday's decision by the European Commission to send the case back to the Spanish government for consideration.
Local analysts agree that the move signals the deal will go through - likely before year-end, considering Spain's four-month deadline. It is widely believed that without prior government approval, the formerly public Telefonica, considered a government ally, would never have entered into the deal.
What is worrying to some however, is the effect a merger would have on acquisition of feature films and other content. Film producers and distributors are hopeful that the recent cut-back in acquisitions at both platforms will be reversed; on the other hand many are wary of the monopolistic negotiating position a single platform could benefit from.
After years of on-again, off-again talks, the two sides announced definitive plans on May 8 for Telefonica to buy into Sogecable and become an equal shareholder alongside Spain's Grupo Prisa and France's Canal Plus. A merged platform would boast more than 2.5 million subscribers in Spain and the lion's share of the market.
Shareholders rallied to the news Friday, boosting Sogecable's shares 12.07% and Telefonica's 4.15%.