Revenue: $1.2 billion

Loss: $309 million

Giant Spanish telco Telefonica’s spectacular incursion into media is coming to a head.

It faces three large challenges: gain regulatory approval for the merger of its digital platform Via Digital with rival pay TV operator Sogecable; help Europe’s biggest format producer, Endemol, morph from a broadcast to a multiplatform producer; and bang some value and synergy into a hodgepodge of media interests, which range from top Spanish pic production company Lolafilms to broadcaster Antena 3, radio venture Onda Cero and Argentine web Telefe.

European Union competition authorities were skedded to rule Aug. 19 on the Sogecable-Via Digital fusion. Foreseeably, the EU will either initiate an in-depth study or turn the merger over to the Spanish government. But a union is vital for the survival of Via, which added just 4,579 first-half subs and recorded a S330.9 million ($294.5 million) net loss in 2001.

By contrast, Endemol remains the jewel in Telefonica’s media crown. The worldwide success of its formats, led by “Big Brother,” pumped up revenues 63% in 2001 to $808 million.

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