Page 63 - MEDIASET ESPAÑA / 2012. Financial Statements, Management and Corporate Governance Report

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FINANCIAL STATEMENTS, MANAGEMENT AND CORPORATE GOVERNANCE REPORT. 2012
Thousands of euros
2011
Balance at
January 1
Increases
from merger Allowances
Reversals /
applications Transfers
Balance at
December 31
Non-current provisions
Provision for outstanding
litigation
12,371 18,137 6,824 (8,733) (297) 28,302
12,371 18,137 6,824 (8,733) (297) 28,302
Provisions short-term
Provision for outstanding
litigation
19 - - (11) - 8
19 - - (11) - 8
Total
Provision for outstanding
litigation 12,390 18,137 6,824 (8,744) (297) 28,310
12,390 18,137 6,824 (8,744) (297) 28,310
Provision for outstanding litigation
At December 31, 2012 and 2011, the non-current provisions for liabilities and charges relate to pending lawsuits and
appeals between the Company and third parties. Provisions recognized in the year relate to new lawsuits brought
against the Company, while reversals relate to litigation that has been resolved.
The Company’s directors and legal advisors have evaluated possible related risks, and where such risks are considered
probable, and their economic effects quantifiable, they have made the appropriate provisions.
Contingencies
Channel increase through access to a multiple digital license
A sentence handed down on November 27, 2012 by the Third Chamber of the Supreme Court (Appeal 442/2010)
canceled the Council of Ministers’ resolution dated July 16, 2010 which assigned each of the Digital Terrestrial TV (TDT)
channel licensing companies (the operators), including MEDIASET ESPAÑA (previously GESTEVISION TELECINCO)
and SOCIEDAD GENERAL DETELEVISION CUATRO, S.A., a multiple digital license with national coverage comprised
of four channels.
This assignment (annulled by the sentence) was enacted by virtue of the application of regulations approved by the
National Technical Plan for Digital Terrestrial TV, which starting in 1998 regulated the transition from analogical to TDT
transmission, finalizing in 2010. The government verified that the companies to be granted the multiple channels had
complied with all the necessary requirements and obligations inherent in proceeding with the appealed assignation in
order to make the transition toTDT.
The sentence was based on the fact that when the the multiple channels were assigned, the General Law on Audiovisual
Communication (LGCA, published one month prior to the appealed Agreement) was applicable; it states that additional
channels assigned under each license must be granted through a public bidding process.This dilemma might have been
circumvented with the mere introduction of a provision by the LGCA granting continuity to the agreement prior to
its enactment.