Televisa posts third-quarter drop

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MEXICO CITY -- Mexican media conglomerate Televisa on Thursday posted a 7% loss in third-quarter net income as capital expenditures and taxes increased, while sales took a hit from the absence of extraordinary ad revenue earned from last year's World Cup broadcasts.

Televisa, the world's largest producer of Spanish-language programming, reported a net income of 2.6 billion pesos ($240 million), down from 2.8 billion pesos a year ago.

During the year-earlier period, Mexican networks raked in strong ad revenue from transmissions of World Cup soccer matches.

Total network sales rose nearly 9% to 10.4 billion pesos. Televisa said it expects broadcast TV sales to decrease by about 3% on the year.

Televisa-owned satcaster Sky Mexico, the company's No. 2 revenue generator, reported a 5.5% jump in quarterly net sales as its subscriber base climbed to more than 1.5 million.

Cablevision, one of the nation's biggest cable operators, posted a 17% spike in sales.

The Mexican media giant invested $88.5 million in third-quarter capital expenditures, including nearly $20 million in its cable TV segment, $30 million in Sky Mexico, nearly $11 million in its gaming business and $27 million in its broadcast TV unit and other businesses. It also made a $5 million equity investment in La Sexta, its free-to-air television venture in Spain.

Also during the quarter, Televisa acquired Argentine publishing company Editorial Atlantida for about $78 million, signed an agreement to acquire a majority stake in Mexican telecom firm Bestel for $256 million, and purchased two leading cable companies.

The Mexico City-based outfit recently announced plans to co-produce English-language films and TV series with Lionsgate for the U.S. market.

Televisa chief Emilio Azcarraga said the deal will allow his company to extend its reach in the U.S. market beyond Spanish-speaking audiences.

"Televisa content accounts for 75% of the Spanish-language Hispanic market in the U.S., but once the younger generation moves from Spanish- to English-language, we lose them," he said in his keynote speech at MIPCOM.

The deal could create further tension between Televisa and its stateside partner, U.S. Spanish-language broadcaster Univision. The two companies have an ongoing dispute concerning their long-term program license agreement. Televisa, which provides Univision with the bulk of its primetime programming, said it wants to terminate the agreement with Univision as it explores new business opportunities in the burgeoning Latino market.
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