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Real Madrid scores $1.4 bn deal

Sogecable has to double its money to keep soccer rights

MADRID — In what looks like the biggest Spanish soccer deal ever, production, broadcasting and rights broking company Mediapro has tied down rights to Real Madrid soccer games until 2012/13 for, according to Real Madrid, north of a massive Euros 1.1 billion ($1.4 billion).

The market assumption is that Mediapro has been negotiating with the consent and knowledge of Spanish pay TV leader Sogecable — Mediapro and Sogecable co-own sports rights broker Audiovisual Sport in a 75% Sogecable/25% Mediapro split.

If so, Sogecable will have fought off reported plays for Real Madrid rights from Madrid pubcaster TeleMa-drid and even, according to press speculation, Rupert Murdoch’s News Corp.

But even if Sogecable has tied down pay TV rights to Real Madrid games through 2013, it is a pyrrhic victory.

Assuming Sogecable pays 75% of the rights, by Real Madrid’s count Sogecable will be poneying up at least Euros 117.9 million ($150.9 million) a year for Real Madrid games, more than doubling the $70.4 million it is currently paying annually through 2008.

And there’s not that much visibility about the deal.

Mediapro announced Monday that its deal will respect current Real Madrid rights commitments, but Real Madrid claims the new deal kicks in from “the current” season. And both Real Madrid and Mediapro speak about the accord involving “specific audiovisual rights,” whatever that means.

“The deal is negative, because of lack of information, because we don’t know how the deal is going to be split, and because [the price for Sogecable] goes from at least $70 million to $151 million a year, if not more,” said Fabian Lares, at Espirito Santo Investment.

Sogecable stock dropped 1.56% in morning trading on Madrid’s Ibex bourse.

The market had factored in that Sogecable would retain pay TV in Spain, but at a large price.

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