SAT-IBERIA 06.05.1998

SAT-IBERIA - Edition 1/98 - May 6th 1998
Satellite and media news from Spain, Portugal and Latin America
Edited by Branislav Pekic

Welcome to all readers of this weekly service, which will try to keep you
informed of the latest satellite and media developments in Spain and
Portugal. The service will also carry some news from Latin America and
eventually (if there is enough interest) a separate news mailer for Latin
American news may be started. Please feel free to contact me with your
questions and comments.

S P A I N  A N D  P O R T U G A L 

In order to resolve funding problems (total debts reach 600,000 million
pesetas), the Spanish public broadcaster, RTVE, has suggested to the
Spanish government the introduction of a TV license fee. If the proposal is
accepted all Spanish households with a TV (estimated to total 11 million)
will have to pay 20,000 pesetas a year. This amount has been calculated
taking in account various demographic and economic variables. 
The study which has been commissioned by RTVE has taken in account the
experiences of other European public broadcasters: the British (TV license
fee, no advertising), Portuguese (financed by the government through
special contracts) and the Greek model (viewers pay a TV tax through their
electricity bills). In an interview to the daily "El Pais", the director of
RTVE, Fernando Lopez-Amor admitted that the introduction of the TV license
fee would provoke severe advertising restrictions for TVE, as has already
happened with other European public broadcasters which also carry
advertising. He made it clear that "every peseta less from advertising will
have to be paid by the viewers".
However, López-Amor made it clear that RTVE is not pressing the government
to adopt the TV license fee and added that personally he is against the
idea, because the "Spanish mentality is not prepared for such a solution".
Instead he supports a mixed solution: financing from advertising and
subventions. The Secretary of State for economy, Cristóbal Montoro has
already said that the government will not "in principle" impose the TV
license fee.

Canal Satélite Digital and the Fox Kids channel have signed a deal, which
will see enable the Spanish children's channel Minimax to air more than 40
hours weekly of programs produced by the U.S., based channel. According to
the terms of the deal, Minimax, the channel that forms part of Canal
Satélite Digital's basic package, will start airing these new programs from
May 1st. 
Fox Kids will supply Minimax with animated series such as Super Mario Bros
as well as education programs, comedies, dramas, action and adventure
series. This block of programs will be principally aimed at viewers in the
2-11 year age group. Every day, Fox Kids will have it's own slot in the
program schedule of Minimax - from 07:00-10:00 and 17:00-20:00
Spain's first children's channel, Minimax started transmissions in December
1993 as part of CanalSatélite's analogue pay-TV bouquet. Since January
1997, Minimax is part of 
Canal Satélite Digital's basic package. Fox Kids Europe Limited is a
subsidiary of Fox Kids Worldwide Inc which was formed back in 1996 with the
merger of Fox Children's Network and the production company Saban

The Spanish telecom operator Telefónica hopes to recuperate its investments
in the digital platform Via Digital in 10 years. This is one of the key
points of the new financial report presented by Via Digital's president
Juan Villalonga to potential investors.
Via Digital, in which Telefonica holds a 35% stake ended the financial year
1997 with losses totalling 13,743 million pesetas. The president of the
digital platform, Pedro Pérez, recently announced that the company will
reach a break-even point in the year 2001 when it expects to have one
million subscribers. Figures from the end of March show that there are
currently around 171,000 subscribers. It's main rival, Canal Satélite
Digital is the market leader with more than 440,000 subscribers and hopes
to end the year with around 750,000 subscribers. 

Portugal Telecom and Telefónica have agreed to create a joint venture
company for investments in countries outside the Portuguese- and Spanish-
speaking countries. According to the terms of the agreement, the
headquarters of the new company will be in Lisbon. The president will be a
representative of Portugal Telecom and the Chief Executive Officer will be
designated by Telefónica.
This new accord reaffirms and develops the commitment by both companies to
act jointly in their international expansion. The agreement foresees the
possibility that Portugal Telecom become a shareholder in Telefónica
Internacional (TISA), through the acquisition of up to 5% of its share
capital, which would give Portugal Telecom the right to designate a member
of TISA´s board. In April 1997, Telefónica agreed to acquire 3.5% of
Portugal Telecom, which in turn will acquire 1% of Telefónica.

The director general of RTVE, Fernando López-Amor and the president of the
Spanish Football Federation, Angel María Villar, have recently signed a
deal which will give the Spanish public broadcaster exclusive TV rights for
all games of the Spanish national team until December 31st 2004. This means
that RTVE will be able to transmit all official as well as friendly games,
both nationally as well as world-wide, via its international satellite
channels. The package also includes live coverage of the finals of the
Spanish championship, the Spanish cup as well as the Supercup.

- More bad news from the analogue front on the HISPASAT satellites. Both
Telecinco and Antenna 3 TV have left their transponders on 12,631 GHz/Ver
and 12,671 GHz/Hor. 
The vacated frequencies will now be used by new digital services.
- Various cable operators which own licenses for cable systems in 13 areas
(potentially serving 3 million households) have formed their own
association. In other cable news, Cableeuropa, one of the leading cable
operators in Spain has offered 33,800 million pesetas for a 100% stake in
it's rival Cable y Televisión de Cataluña (CTC).

L A T I N   A M E R I C A 

Galaxy Latin America, provider of the DIRECTV service in Latin America and
the Caribbean, and Radio Televisión Española (RTVE), Spain's leading
communications group and one of the top television producers in Europe have
recently signed a programming agreement to offer DirecTV subscribers at
least four new Spanish channels, three of which will be offered for the
first time in Latin America.  
According to the agreement, DirecTV subscribers in Latin America will
receive, starting from this month, Televisión Española Internacional,
Hispavisión, Euronews and Radio Nacional de España (Radio Uno). Televisión
Española Internacional offers the best of Spain's two national channels,
while Hispavisión offers first-rate documentaries. Euronews is an
international news service offered in six languages (Spanish, English,
French, German, Italian and Arab), all available via DirecTV. Radio Uno, is
a Spanish radio channel that offers news, talk shows, interviews, sports
and music shows. This will be the first time that Hispavisión, Euronews and
Radio Uno are broadcast in Latin America.  
GLA also has the option to add Canal 24 horas, a Spanish news channel and
Radio Clásica (Radio Dos), the best selection of classical music currently
available in Europe. It may also add other channels currently being
As part of the agreement, RTVE will also provide the signal for The First
Division Spanish Soccer League games to DirecTV. It will also create a
weekly half-hour show highlighting the games of the week. Currently, GLA
and the U.S. DirecTV service are developing Hispanic-programming offerings
for the U.S. market.  
"With this agreement, Radio Televisión Española moves one step closer to
one of our objectives, to reach the Americas. We're grateful to Galaxy
Latin America for opening their doors, not only to Televisión Española
Internacional, but also to new theme channels for television and radio
targeted to audiences in the Americas, including the United States, as an
aim to preserve the Spanish culture and language," said Fernando López-Amor
y García, general director of RTVE.  

Dallas investment firm Hicks, Muse Tate & Furst Inc. and Cisneros Group of
Venezuela are planning to buy stakes in broadcasting and media companies in
Latin America, Spain, and Portugal. The joint venture comes as both firms
had built up investments in Latin American cable, wireless-cable and
satellite-TV companies but were seeking to expand their reach in broadcast
television and radio. Hicks Muse and Cisneros have each committed as much
as $250 million for the fund, but as opportunities arise will bring in
equity partners or contribute additional capital, probably as much as $1
billion. The joint venture will attempt to capitalise on Hicks Muse's
financial expertise and experience in the U.S. media, and the Cisneros
Group on the ground business experience in Latin America. 
Hick's Muse also began a major push into Latin America last year, investing
$400 million in financial, food, manufacturing and media companies. In
Mexico, it bought a minority stake (for $120 million) in Mexico's MVS, a
media company that is partner with Cisneros' Galaxy Latin America, a
provider for satellite television. Cisneros Group for it's part owns
several TV stations and programming production companies in Chile,
Argentina, Trinidad and the U.S., with Univision, America's largest
Hispanic television network. One of its most important investments is its
20% share of Galaxy Latin America, whose other owners include General
Motors Corp.'s Hughes Electronics unit, MVS and Grupo Abril of Brazil. The
Cisneros family has invested more than $100 million in the venture and
plans to invest an additional $80 million in the next three years.

PanAmSat Corporation announced on May 1st that Hughes Electronics
Corporation is increasing its equity position in the company to 81% percent
through the purchase of approximately 14.1 million shares or 9.5 percent of
PanAmSat common stock from Grupo Televisa, S.A. and a group of founding
shareholders of the original PanAmSat company. Hughes has stated that it
has no present intention to increase its PanAmSat ownership beyond 81
percent. PanAmSat currently operates a global network of 17 satellites and
plans to launch seven additional satellites by late 1999. 

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