Spain’s cable merger still on

Duo has until Wed. to reply to 34 anti-trust conditions

MADRID — Spain’s Science and Technology Minister Josep Pique said Tuesday that he expected pay TV operators Sogecable and Telefonica to go ahead with the merger of their digital TV platforms.

Sogecable and Telefonica have until today to reply to 34 anti-trust conditions imposed on the merger by the government on Nov. 29.

“Everything points to the companies going ahead with the merger,” Pique remarked.

Telefonica prexy Cesar Alierta declared that Telefonica would make a formal response today.

However, Telefonica and Sogecable are likely to appeal against a government-imposed price freeze on subscriber rates.

Complex questions, including debt responsibility, may have to wait until after the merger gets the greenlight.

Meanwhile, the government is considering raising the bar on film and TV tax breaks in Spain to 20%.

Private investors rarely use the present 5% exemption on tax-payable moneys that they invest in Spanish movies or TV programming as financial co-producers.

Culture Minister Pilar del Castillo told Monday’s emergency meeting with representatives of the film production industry that the tax breaks were too insignificant to be attractive.

She added that the government had commissioned a report to study the effects of increasing exemptions.

“Discussion turned on raising the tax breaks to 20%,” said producer Andres Vicente Gomez. “That could make a difference, attracting private finance for the Spanish film industry,” he added.

Producers also urged the government to double Spain’s subsidy fund to 80 million euros ($74.1 million) and for film protection to be enforced.

Per Gomez, producers have to wait up to 27 months after a film’s bow in Spain to receive B.O.-tabbed subsidies. And there are no effective mechanisms to ensure that exhibitors meet quotas to screen European films or that private TV nets invest 5% of their annual revenue in European pics.

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