Page 67 - MEDIASET ESPAÑA / 2013. Financial Statements, Management and Corporate Governance Report

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MEDIASET ESPAÑA COMUNICACIÓN, S.A.
NOTES TOTHE FINANCIAL STATEMENTS FOR THEYEAR ENDED DECEMBER 31, 2013
(Thousands of euros)
Provision for outstanding litigation
At December 31, 2013 and 2012, 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 and applications relate to litigations that have 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 inherent problem that the assignment of the multiple channels took place while the
General Law on Audiovisual Communication (LGCA, published one month prior to the appealed Agreement), which
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 COMUNICACION, S.A.) “must cease broadcasting
the digital TV channels affected by the annulled Council of Ministers’ resolution dated July 16, 2010”. As regards
MEDIASET ESPAÑA COMUNICACION, S.A., this would affect 2 of the 8 channels it currently runs and manages.
MEDIASET ESPAÑA COMUNICACION, S.A. 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.