Televisa Q1 net income up 48%

Net profit slightly more than 1 billion pesos

MEXICO CITY -- Mexican media giant Televisa on Thursday reported a 48% increase in first-quarter net income as profitability was dragged down in the year-earlier period by affiliate losses and taxes.

Televisa, the world's largest producer of Spanish-language programming, posted a quarterly net profit of slightly more than 1 billion pesos ($99 million), up from 713 million pesos a year ago.

Net sales came in at 9.5 billion pesos ($910 million), representing a 16% increase.

Sky Mexico, Televisa's No. 2 revenue generator, saw sales increase 10% and its subscriber base jump to 1.6 million, while the cable and telecom unit reported a 91% rise in sales.

Looking ahead, Televisa estimates its television broadcasting sales and operating segment will grow by 4.5% in nominal terms.

Programming exports also grew, as Televisa received an increase in royalties from its U.S. partner Univision.

Nevertheless, Televisa's business relationship with Univision has reached a critical juncture as it seeks to terminate an exclusive program license agreement, or PLA, with the U.S. Spanish-language broadcaster for alleged breach of contract.

A trial will begin Tuesday at a U.S. District Court in Los Angeles. The court also will hear Televisa's lawsuit over rights to distribute programming over the Internet in the U.S. Univision maintains that a provision under the PLA prohibits Televisa from distributing new media content stateside.

"We are confident that the facts are on our side and that Univision will prevail at trail once we present our case," Univision said.

The long-running legal dispute between the Spanish-language media titans has major implications for both companies. Over the years, Televisa's popular soaps have been a strong ratings draw for Univision. Should Televisa win the case, it may look to sell its programming to Univision rival Telemundo, or perhaps launch its own U.S. network.

"The goal of this litigation and Televisa is to terminate the PLA," said Marshall Grossman of Bingham McCutchen, the Santa Monica law firm representing Televisa.
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