It’s hard to say whether Mediapro would be the audiovisual giant it is today without weathering the many storms it has faced in its almost 30-year history. He experienced a storm when he acquired the football television rights of Real Madrid and FC Barcelona, paying 1,000 million euros for each of these contracts and starting one of the football wars that even led him to file for bankruptcy proceedings. He reached for his checkbook again when he wrested the Formula One prizes from Telecinco, and overtook Berlusconi’s network in negotiations when he learned that Spain would win two major prizes in the following seasons and that this would help him keep the company profitable close . Nor was he intimidated when he came to Paris three years ago to steal Canal+’s French professional football league games, checkbook in hand. The company has always accompanied this courage with an attitude that ignores ideologies and even supposed contradictions in business life: it is able to broadcast the television signal of the Congress and at the same time set up the press center for the 2017 independence referendum in Catalonia.
But not all of these adventures ended with a happy ending. It failed when Medipubli launched the newspaper Público. His most recent football stint in France ended abruptly when the pandemic broke out in the first year of his contract. After bitter negotiations and a fierce national controversy, which was preceded by the non-payment of agreed benefits to some clubs that threatened bankruptcy, Mediapro renounced the rights. It was one of the great storms of lightning and thunder to hit the Barcelona-born business conglomerate, although not the first. One of the worst happened in 2018, when he had to pay $24 million after pleading guilty to bribing senior Caribbean managers to secure the rights to the qualifying matches of three World Cups (from 2014 to 2018). .
This case, which affected its reputation, forced, among other things, the departure of Gerard Romy, one of the group’s two founders. The other, Jaume Roures, made a hasty exit last week, giving up his positions as president and CEO at the request of Southwind Media, the fund that controls 80% of the capital. The disagreements over his departure even affected his personal relationship with Tatxo Benet, with whom he shared company tasks and friendship for decades and who has now taken over the management.
Until a US jury uncovered the scandal involving improper payments in the country, the trident Roures-Romy-Tatxo ran the company. A former employee who requests anonymity points out that Benet was the one who played a more entrepreneurial profile, the one who had relationships with previous shareholders such as Televisa and the current Southwind (80%) and WPP (9.5%) cared for. This ability and the freedom to decide alone will give him certain advantages, but the trip has caused him to lose that more ready state that those who know the house attribute to his former partners. Romy controlled the technical area and was an essential part of the mechanism for purchasing and commercializing international rights; Roures was the man with contacts in the world of football and content, especially cinema, of which he was proud to have collaborated with Woody Allen or to have produced some documentaries such as “Las cloacas de Interior” about Jorge’s time. Fernández Díaz during his time as minister. Always adamant in front of the media, he recently demonstrated these relationships a few weeks ago when asked about his financial support for Barcelona in the current era of Joan Laporta. “We also leveraged Florentino Pérez for 6 billion pesetas (36 million euros) in 2000,” he noted, defending that Mediapro seeks stability in the football business, the mainstay of his company.
In any case, Tatxo Benet, who joined the project shortly after its launch in 1994, will be responsible for rescuing Mediapro from the last downpour. A group that generated 1,209 million euros last year and a gross operating profit (Ebitda) of 189 million is now in your hands. A company with 435 million in debt and around 7,100 employees. It is also a group that in 2018 approached a turnover ceiling of 2,000 million (according to Moody’s), which it was unable to recover after the outbreak of the pandemic and which Fitch has warned of an over-reliance on international rights the Spanish professional football league. According to the rating agency, they will represent 40% of EBITDA this year and this profitability is expected to decline in the following years: it’s time to look for alternatives.
The audiovisual rights business
Last May, Mediapro managed to extend the contract with LaLiga, its biggest source of profits, until the 2028/29 season. However, the new contract is not expected to be as profitable as the previous ones, since the compensation variables and the distribution map have been reduced (neither the Middle East, nor North Africa, nor the United States join the new contract). ).
Since the beginning of Mediapro, the exploitation of audiovisual rights has been the company’s main business. In recent years, the company has sought to diversify its revenue streams through three additional business areas: production, broadcast and distribution of events; the production and distribution of content for various streaming platforms and an area of innovation and new businesses that includes eSports. “Rights have always been a domestic matter and there is always a degree of uncertainty about when they will end, but the deal is becoming more and more balanced,” point out company sources, who avoid offering the income distribution. Fitch emphasized in its report that in the long term, Mediapro may have to deal with new operators such as Amazon, which compete with it in the segment of sports rights, but also in film and series production, as is already the case with the rest of the platforms. The Catalan company has produced films by Woody Allen and Oliver Stone and has documentaries and films such as The Good Boss in its catalog.
Both Benet and Roures considered going public six years ago, plans that appear to have been postponed today. Mediapro sources interviewed also rule out the possible sale of its stake by Orient Hontai (owner of Southwind), recently reported by Portal. The Chinese fund has reached 80% of the capital in two operations: in 2018 it paid 1,016 million for 53.5% of the shares. Three years later, the company expanded to its current position after a cash injection of 620 million euros, essentially aimed at paying off debts and enabling a refinancing agreement with its creditors, in order to give the company breathing room, which alone amounts to interest of around 50 million euros each year. Anus. The question now is who will acquire 5% of the shares of Roures, which has already announced its intention to sell.
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