Int'l arm buying Argentine cabler Pramer
BUENOS AIRES — TCI Intl. is reportedly upping its stake in Argentina’s sizable cable biz by purchasing cable programmer Pramer for $80 million. Pramer has annual revenues of around $30 million.
But the deal, expected to be announced in a few days, comes just as President Carlos Menem is throwing his support behind a proposed 21% value added tax on cable.
According to Argentine insiders, Pramer owner Eduardo Eurnekian was due to meet with TCI topper John Malone this week to finalize the sale of the company, which owns a slew of local webs, including newsnet CVN, Music 21 and others.
TCI looking south
TCI Intl. is already a 26% owner of 1.6 million sub operator CableVision, a former property of Eurnekian’s, and a 40% shareholder in soccer rights holder TyC. A TCI spokeswoman denied a deal had been concluded but declined to comment further.
While a deal would substantially boost TCI Intl. as a Latino content provider, the news comes as the 5.4 million subscriber Argentine market faces the possibility of a growth-stunting tax hike.
In a bid to bolster support for his increasingly unpopular government and to comply with the International Monetary Fund demands over the federal deficit, Menem is urging congress to extend Argentina’s 21% VAT to cable TV — and also to media advertising — despite opposition within his own Peronist Party.
The TV/pay TV lobby managed to keep the new tax at bay for six months, in part because Alberto Pierri, leader of the chamber of deputies and a friend of Menem, is a cable operator. But Menem has promised the IMF that by end September the new levy will be approved.
Taxes already high
Already operators pay an 8% tax to regulator Comfer, and among proposals from lobbyists is that this be discounted from the VAT. Other proposals are for operators to pay just 10% the first two years and then 21% from year three, or for operators offering more foreign webs to be taxed more heavily.
The threat of VAT is bad news for a sector that is grappling with low margins and the problem of forcing premium tiers on a public that has never known them.