Telecoms giant Telefonica is reportedly talking to Qatari broadcaster Al Jazeera about sharing Canal+ to get its deal for the Spanish DTH group passed regulators.
Telefonica currently owns 44% of Canal+, also known as Distribuidora de Television. It…
Telecoms giant Telefonica is reportedly talking to Qatari broadcaster Al Jazeera about sharing Canal+ to get its deal for the Spanish DTH group passed regulators.
Telefonica currently owns 44% of Canal+, also known as Distribuidora de Television. It agreed to buy a 56% stake from media conglomerate Prisa in May for €750m (US$792m).
However, Spanish competition authority CNMC has launched an in-depth investigation into the takeover, saying it could “significantly hinder competition” in pay-TV, audio-visual content and electronic communications services markets. It is also facing potential monopoly concerns from the European Commission.
Al Jazeera would likely be most interested in Canal+’s Spanish football rights, although Telefonica has previously been cited saying it would not share content and TV rights that it has acquired on an exclusive basis.
If the Spanish telecoms incumbent were to end up owning less than 50% of Canal+, it could resolve domestic and European competition hurdles. Having a financial partner to help buy football rights, something the Spanish government is looking to sell as a package for the first time for €700m (US$740m), would also be beneficial, reported El Confidencial.
Spokespeople for both companies declined comment.
Al Jazeera had reportedly been stalking Canal+ via its local partner production house Mediapro before being beaten out by Telefonica.
Qatar Airways is the main sponsor of FC Barcelona, one of Spain’s top two teams alongside FC Madrid, and is thought to have helped Telefonica win the team’s broadcasting rights. This was part of a tacit agreement between the emirate and the telco resulting from 18 months of talks, which started when Qatar voiced interest in becoming a Telefonica shareholder – something that has not been ruled out in the context of the €3bn (US$3.17bn) rights issue it announced last month.
El Confidencial notes that Nasser Al-Khelaifi, a member of the Qatari royal family, acquired Turkish DTH group Digiturk for some US$820m as part of a move to grow Al Jazeera Sports. Qataris also own Paris St Germain, another football team, via Qatar Sports Investments.
Telefonica has so far been against CNMC requirements that it share content and TV rights with rivals such as French incumbent telco Orange, which is amid its own regulatory review to acquire fixed-line telco Jazztel, and Vodafone, which now owns cableco Ono.
It has said it could “lose interest” in the transaction if the CNMC did not soften its demands, especially around football rights. It has also applied pressure on the government, saying that if it was obliged to share fibre – as part of a separate measure – it would stop investing in high speed networks.
Telefonica CEO Cesar Alierta, who has reportedly been lobbying government ministers, told analysts at its full year results in February that he was “reasonably optimistic” that the deal would be approved and completed “within the next two months”.
European telcos have been showing renewed post-recession vigour recently, carrying out domestic consolidation while also bolstering their position in pay-TV via M&A and partnerships. British telecoms incumbent BT has bought UK sports rights, Orange last week announced an incipient telecoms and media partnership with former rival Vivendi, and Telecom Italia CEO Marco Patuano has said he too is in favour of partnerships with the likes of Italian pay-TV firm Mediaset and UK satellite broadcaster Sky. Aggressive expansionist Altice, a Luxembourg-based telecoms holding, has for its part vowed to become a distributor and then a producer of content.
