Televisa, the world’s largest producer of Spanish-language TV content and a dominant force in Latin America, is determined to build its biz in Europe, but an early foray into network ownership in Spain seems stuck in neutral.

Now €270 million ($200 million) deep in its investment in free-to-air Spanish web La Sexta, Televisa’s declaration that it was talking to regional players for a possible sale may well lead nowhere, according to analysts who spoke with Variety.

According to Tomas Lajous of UBS Investment Research, the reports that surfaced in late January were a belated reaction to news that merger negotiations between La Sexta and Spanish broadcaster Antena 3 had broken down again after years of on-again, off-again talks.

The most recent round began after October’s regulatory approval of the merger between Spanish broadcasters Telecinco and Cuatro, creating a new entity with a hefty 25% share of the market.

La Sexta, which Lajous described as “small and loss-making,” has only a 6% share of the market despite output deals with Warner Bros. Intl. TV, Sony, Paramount and Fox, which feed it popular U.S. fare such as “Iron Man 2″ and “Shrek Forever After.” He sees a merger with Antena 3, with its 12% share, as the most logical move.

Lajous believes a Televisa divestment is unlikely given how much capital it has been put in, against the likely market value of its 40.5% share of the company’s earnings.

“We value La Sexta at just a third of its capital contributions, or $305 million (on losses),” Lajous says. “We have no indication that anyone would buy just Televisa’s stake.”

The analyst notes that Televisa would likely ask for at least its investment in the company, an unsavory pricetag for Antena 3 if it is not part of a greater deal to buy the web outright. However, a buyout would involve cutting through as much regulatory red tape as a merger. Despite that, “the logical deal is still (to merge) Antena 3 and La Sexta,” says Lajous.

BBVA Bancomer media analyst Andres Coello doubts that even a merger would be in Televisa’s best interests, given the reduced share it would have in a merged company, which he estimates at 27.5%. “It needs to weigh the longterm outlook against the shortterm,” says Coello. “The best thing would be to try to achieve better results with La Sexta.”

That said, the analyst noted that Televisa may not want to continue infusing cash into what could be a losing prospect — but given the situation, a better-performing, higher-valued La Sexta down the road would be the best outcome for the Mexican conglom.

Televisa’s investment in La Sexta, which has one analog and two digital channels, is one of its less successful forays into content distribution. For Televisa, content has long been king, and its telenovelas are the gold standard for hit potential across the globe. But getting content into new markets is the key to success or failure in terms of international growth.

“There’s this pendulum going between content production and distribution,” says Barclays Capital analyst Michel Morin, adding that the trick for a company is knowing which it does best. “Most do a bit of both. Televisa has had to take a key role in distribution so that its content is available,” he says. “Content production is by far the bigger part of its biz, and that’s always what it tries to leverage.”

In recent years, one source of growth has been its expansion into feevee platforms in Latin America and content packaging for sale to satcasters and cablers.

As of September, the company had 25 million subscribers across Latin America on platforms that averaged 5.2 Televisa-packaged channels each.

The conglom’s feevee revenue was up 17.7% year-to-year in the third quarter to about $63.3 million, beginning to overtake export sales, which pulled in $60.2 million in the quarter.

Despite some successes in format sales in China and Europe on top of long-standing in-the-can sales to places like Nigeria and Eastern Europe, export sales saw little growth last year.

Morin noted that of the $5 billion or so Televisa takes in as revenue each year, only about $225 million comes from export sales, and $150 million of that is from Univision with most of the rest coming from Latin America.

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