Televisa to take 100% control of Sky Mexico

Source: Alamy.com

Grupo Televisa has struck a deal with US telco AT&T to acquire its stake in Sky Mexico, giving the Mexican media giant 100% of the pay TV operator.

Televisa previously owned 58.7% of Sky to AT&T’s 41.3%.

The pair did not reveal the price of the deal. They have however agreed that the transaction payment will be made by Televisa in 2027 and 2028, leading some observers to speculate that part of the consideration could be in the form of an performance-related payout.

The deal is subject to regulatory approval.

Ratings agency Fitch said that the transaction would be neutral to credit ratings, and that it expected synergies and efficiencies from the deal to allow Televisa to maintain its leverage metrics at levels aligned with its current (BBB/Negative) rating. Last month, Moody’s Investor Service downgraded its long-term issuer rating and its senior unsecured ratings on the company to ‘Baa3’ from ‘Baa2’, with stable outlook.

Luis Malvido will meanwhile step down as CEO of Sky on April 15, after serving in this position for over two years.

Grupo Televisa’s co-CEOs, Bernardo Gómez and Alfonso de Angoitia, said: “On behalf of Grupo Televisa, we would like to express our deepest gratitude to Luis for his leadership, innovation, and valuable contributions to the Company. Luis has been instrumental in the evolution and simplification processes of our core business at Sky, and we wish him continued success in his future projects.”

Francisco Valim will take over as CEO of Sky and will remain as CEO of Grupo Televisa’s cable arm, izzi.

“As CEO of both the Cable and Sky segments, Francisco will have the mandate of generating significant synergies and efficiencies for Televisa. We are confident this decision will allow us to strengthen Televisa’s competitive and financial position,” said Gómez and de Angoitia.

Revenue decline

Sky Mexico reportedly had a 58% subscriber market share of Mexican pay TV, and was the second largest broadband operator in the country, with a 24.7% share, as of June last year.

At the end of last year, Televisa reported that Sky had total revenue-generating units of more than 6.1 million, but that it had suffered around 798,000 net disconnections over the year, of which more than 85% were prepaid video subscribers. Televisa’s 2.3% revenue decline over the year was largely attributed to Sky’s performance.  Sky revenues, as reported by Televisa, were MXN17.59 billion (US$1.06 billion) for 2023, down 13.5%, and operating income of MXN5.73 billion, down 10.7%.