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Televisa stock up

MEXICO CITY — A combination of strong fourth-quarter results and the confirming of a new management team proved exactly the right tonic for media giant Televisa, whose stock began to recover Tuesday after a two-month, 30% decline.

Emilio Azcarraga Milmo, Televisa’s majority-owner and CEO of 25 years, said Monday he was stepping down for health reasons and handing control to his son Emilio Azcarraga Jean, 29, and his CFO, Guillermo Canedo White.

Though Azcarraga Milmo, 66, has ruled Televisa in autocratic fashion since 1972, the departing prez said his son and Canedo White have effectively run the company on a day-to-day basis “for some time.”

In the newly created position of founding chairman, Azcarraga Milmo will continue to be closely involved in Televisa’s satcasting ventures, such as Sky Latin America, Televisa’s direct-to-home (DTH) partnership with News Corp., TCI Intl. and Brazil’s Globo.

“It doesn’t change anything,” said Sky CEO David Evans of the leadership change. “Besides, Guillermo Canedo is a very bright guy. Financially, he’s brilliant and he has a good feel for television and the satellite business.”

Analysts have expressed concern about management depth at Televisa, but the promotion of Canedo White to chairman is widely seen as a reassurance to shareholders that the young Azcarraga Jean will not yet be saddled with the full burden of Televisa leadership.

The new team, which also includes seasoned politician Miguel Aleman Velasco as vice chairman and former Univision chairman Jaime Davila as chief operating officer, now faces the twin tasks of turning Televisa’s $180 million investment in Latino DTH into a viable business and halting a 16-month slide in domestic broadcast audience share.

While concerns over DTH, ratings slippage and Azcarraga Milmo’s recent ill health fueled the two-month slide in Televisa’s stock price, the company’s fourth-quarter results and predictions for 1997 revenues have given investors cause for cheer.

“TV sales were strong and operating cash flow was very positive,” said Shayne McGuire of Deutsche Morgan Grenfell. He added that 1997 looks very good for Televisa, with TV revenues forecast to climb strongly.

Though substantial debt financing costs contributed to a net loss for the year of $78 million (on revenues of $1.46 billion), McGuire said interest expenses were lower than expected, indicating the benefit of debt restructuring during 1996.

Televisa ADRs closed Tuesday on Wall Street up 4.2% in the face of a down market.

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