Spanish Broadcasters See 2012 Profits Dive

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Spain's two biggest broadcasters blame the dire economic situation for a drop in revenues.

MADRID - Spain's two biggest private broadcasters -- Mediaset Espana and Antena 3 -- blamed the stark financial crisis gripping the country, forcing companies to cut ad spending, for plummeting profits, although both managed to net upwards of analysts' expectations.

Mediaset Espana netted a year-end profit of €50 million ($65.68 million), a 55 percent drop from the previous year, while revenue dropped 12 percent to €886.7 million  ($1.16 billion), outperforming many analysts' predictions, which had expected some €880 million  ($1.15 billion) in sales.

The lion's share of sales -- €816.76 million  ($1 billion) -- came from ad sales on the group's television channels, Telecinco, Cuatro, Fiction Factory, Divinity, Boing, LaSiete and Energy Aventaja.

Antena 3 posted €31.9 million  ($41.87 million) in profit, a 65.8 percent slide from 2011, with revenues dropping 8 percent to €741.16 million  ($972.8 million).

Television ad investment shrank 20 percent in Spain in the final quarter of 2012, as companies grapple with austerity measures, 26 percent unemployment and a dark financial climate.

Mediaset saw costs (€837.92 million  or $1 billion) stay about the same--with a 0.7 percent rise over 2011-- thanks to a strict cost-cutting policy. That figure includes blue-chip rights like the Euro Cup, Roland Garros and the Motorcycle World Championship.

"The accuracy with which strategic decisions about production and programming geared toward restricting costs, while maintaining the balance with a quality offer has been key for compensating the dramatic contraction of the market," Mediaset -- Spain's most profitable mediagroup -- said in a statement.

Market leader Mediaset's cluster of channels account for 28.1 percent of the audience, with its flagship channel Telecinco snaring 13.9 percent overall. Antena 3 follows closely with its channels -- Antena 3 and La Sexta, which merged in 2012--with 25.8 percent.

While Mediaset maintained its lead, Antena 3 highlighted its ability to compete with only two channels.

"In a year marked by the crisis in the advertising sector and competing the first nine months with a larger rival, [the group] has been able to reduce the consequences of the advertising investment thanks largely to increasing the audience for its channels," the group said, pointing that Antena 3 was the only channel in the market to increase its share. The channel won 12.4 percent share--one point over the previous year--while La Sexta inched up 0.3 percent.

The final quarter saw Antena 3 significantly close the gap between the two rivals with 27.6 percent share, 2.2 points above its same figure the previous year, and just behind Mediaset.