Ad revs drying up for TV Azteca

Rangel expecting 'mid- to high single-digit growth'

After posting solid growth through the year, Mexico’s No. 2 web, TV Azteca, will face a tougher run in the coming months.

Bruno Rangel, head of TV Azteca’s investor relations, said in a conference call with analysts Thursday that the web is expecting “mid- to high single-digit growth” for the year, suggesting the fourth quarter will be soft compared with highs earlier in the year.

On Wednesday, Azteca posted third-quarter revenue of $213 million, up 7% on the same period last year, while profits were up 16% to $44 million.

The tap has run dry on windfall revenue from Mexico’s presidential elections, which have been padding broadcasters’ coffers since last year, and Mexico won’t see another major sporting event to equal this summer’s soccer World Cup until the 2008 Olympics.

For the 2007 upfront that’s already begun, Rangel said the web expected price increases to be mostly flat compared with last year’s 8% hike.

U.S. subsid Azteca America will continue on the red side of breakeven in the coming quarters. But Rangel said that continuing to position the U.S. web, which recently achieved Nielsen status as a national network, is worth the cost. Azteca America saw a 33% rise in revenue to more than $11 million during the quarter.

“We had been concentrating on distribution, and now we are focusing on raising audience shares and sales,” Rangel said.

On Thursday, Azteca America announced it had clinched a carriage deal with Time Warner Cable to offer Azteca America in areas not served by Azteca terrestrial affiliates.

The web said cities in North and South Carolina are the first areas added under the pact. Net claims to cover 88% of the U.S. Hispanic aud and nabs around 5% of primetime eyes.

TV Azteca’s rent on its KAZA Los Angeles has gone up as part of an agreement with Pappas Telecasting to $2.4 million per quarter.

TV Azteca is also pumping some cash into Proyecto 40, formerly known as Canal 40, which is targeting upscale Mexico City residents with its news, analysis and docu programming.

At the beginning of the year, TV Azteca staged a legal coup to win control of the weblet’s programming, but it is still fighting in court to gain complete control of the station.

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