Market Watch

Blow for Turner, Prisa as Spanish Channel Shuts


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Popular 24-hour Spanish free news channel CNN+ is to close 31st December 2010 after 11 years of broadcasting in the country leaving a big gap in the free to air portfolios of Turner Broadcasting and Prisa, the channel's two backers. Originally launched 27th January 1999 on Prisa's satellite platform Canal Satelite.The channel has since been available on free DTT in Spain reaching more than 14m homes. Closure of the channel means an exit from the free to air market for Prisa and leaves Turner's only stake in DTT in the form of kids channel Boing, a joint venture with Italy's Mediaset. Spanish DTT has become a key market for international channel groups with Disney, Sony and Viacom all active on free DTT. This decision will not affect Turner's CNN International which will still be available in Spain.

Analysis
The suprise closure of the channel has a complex background involving previous deals between Prisa, Italy's Mediaset and its Spanish national channel Telecinco. In December 2009 Mediaset agreed to invest in Prisa's struggling pay TV platform Digital Plus (itself the result of an earlier merger between Canal Satelite and Telefonica-backed Via Digital). Through Telecinco, Mediaset took a 22 per cent  stake in Digital Plus and acquired Prisa's national free-to-air channel Cuatro as well as control of the four DTT multiplex slots controlled by the group. Prisa reserved the right to lease one slot back in order to keep CNN+ open. The channel has become an important contributor to plurality in the Spanish market, offering a counter point to government-backed TVE 24, the other main source of news on DTT. But following a review of operations, Prisa decided not to hang onto the slot, claiming that CNN+ was not profitable and was burning through annual operating costs of Euro5.5m while gaining just 0.6 per cent audience share. Following the loss of control of its DTT slots to Telecinco, CNN+ would have incurred additional costs to lease back the DTT spectrum. All the employees of Sogecable news group (CINTV) which operated CNN+ will move to Telecinco news agency Atlas. Prisa says it will launch a new news channel on its pay platform Digital Plus.

The decision also comes just a few months after hedge fund Liberty Acquisition Holdings bought a major stake in Prisa and less than a month since it pumped an extra Euro650m into the group as part of a capital increase. CNN+ partner Turner has expressed concern over the decision to close the channel and will now need to find alternatives to maintain its free-to-air reach in the Spanish market. The Spanish media's reaction to this news has been divided with some sectors arguing that this is a result of Telecinco's right-wing political orientation scuppering a competing left-slanted news channel. However, the financial position of Prisa and recent influx of new influence could also have played its part in what may be simply a reaction to a harsh business reality.

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