Page 167 - MEDIASET ESPAÑA / 2013. Financial Statements, Management and Corporate Governance Report

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MEDIASET ESPAÑA COMUNICACIÓN, S.A. AND SUBSIDIARIES
NOTES TOTHE CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2013
(Expressed in thousand of euros)
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 GESTEVISIÓN TELECINCO)
and SOCIEDAD GENERAL DETELEVISION CUATRO, S.A., a multiple digital license with national coverage, increasing
the channels it manages to four.
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 1,998 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 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.
The Supreme Court viewed this obstacle to be a mere formality, and the TDT’s original basis was never questioned;
therefore, the eventual assignment of multiple channels to each operator was not a complex issue.
During the Council of Ministers’ meeting held March 22, 2013, an agreement was reached to execute the sentence
whereby private stateTV operators (including MEDIASET ESPAÑA COMUNICACIÓN) “must cease broadcasting the
digital TV channels affected by the annulled Council of Ministers’ resolution dated July 16, 2010”. As regards MEDIASET
ESPAÑA COMUNICACIÓN, this would affect 2 of the 8 channels it currently runs and manages.
MEDIASET ESPAÑA COMUNICACIÓN challenged the ruling individually as well as collectively through UTECA
(private state TV entity association), as it considers that the agreement was reached based on a false assumption
regarding the sentence’s intentions.The sentence did not contemplate cancellation of the channel’s assigned signal nor
did it intend to state that cancellations would be linked to a “liberation of the digital dividend”.
On December 18, 2013, the Supreme Court resolved the appeal filed against the Council of Ministers’ agreement
ratifying the sentence as well as the cancellation of the affected channels.
Considering the crux of the problem, however, it is strictly formal in nature, and therefore is subject to amendment by
the government; therefore, MEDIASET ESPAÑA COMUNICACIÓN, S.A. considers a satisfactory outcome as likely. In
any event, the potential effects of this contingency have been taken into account when testing asset impairment of the
goodwill assigned to the free-to-air TV business cash-generating unit (Note 9).
PROCEDURES RELATIVE TOTHE LATE PRESENTATION OF THE ACTION PLAN
On August 2, 2011, the Comisión Nacional de la Competencia (CNC - anti-trust authorities) handed down a resolution
on dossier SNC/0012/11 (ConcentraciónTelecinco-Cuatro) in which it declared Mediaset España responsible for a very
serious violation of Anti-Trust Law, as it did not present an Action Plan (including commitments with the CNC) within
the established deadline, setting a fine of 3,600,000 euros.