You are using an older browser version. Please use a supported version for the best MSN experience.

Patrick Drahi’s Altice Buys Portugal’s Media Capital

Variety logo Variety 7/14/2017 John Hopewell
© Provided by Variety

Continuing its acquisitions spree but this time in Europe, Patrick Drahi’s Netherlands-based Altice announced Friday that it has reached a definitive agreement to acquire 94.7% of Media Capital, Portugal’s biggest media company, from Spanish media group Prisa.

Media Capital’s assets take in the country’s biggest free-to-air broadcaster, TVI, and its largest content producer, Plural Entertainment.

The acquisition, which still has to gain regulatory approval, values Media Capital at €440 million ($503 million), subject to debt and working capital adjustments, Altice said in a press statement Friday.

In its own press statement, Prisa estimated the final value of the deal at €321 million ($366 million).

The purchase is a clear drive towards bringing broadband Internet and TV under one roof, the strategy pursued by Drahi (pictured) in the U.S. and France. In Portugal, Altice already owns Portugal Telecom, the country’s biggest operator.

“The acquisition of Media Capital forms part of Altice’s global convergence strategy and follows its path in France, the United States and Israel,” Altice said.

As Media Capital’s owner, Altice will now “invest into digital expansion,” “launch new, innovative services,” “accelerate investments into Portuguese content,” and “use Plural as the global content production hub,” Altice said, promising “more choice focused on local production and formats.”

For Michel Combes, Altice CEO, the deal is “a unique opportunity to invest more capital in a market which has been our home for many years.”

He added: “We want to capture the many growth opportunities Media Capital offers not just in Portugal but also internationally based on an ambitious agenda focused on more digital, more content and more innovation.”

In France, especially sinceDecember, Altice has driven hard into content, inking deals to exclusively distribute Discovery channels and NBCUniversal Intl. channels, films and series; to sub-license Netflix; and, most crucially, to broadcast UEFA Champions League soccer matches over the 2018-19 to 2020-21 seasons, paying €350 million ($400 million) a season, a huge price hike from before. Atice has also bought first broadcast rights to Luc Besson’s “Taken,” among other series, and co-produced “Riviera” with Sky.

In Spain, Telefonica, via pay-TV unit Movistar +,  has committed €100 million ($114 million) to the production of original content this year, including four premium series.

“This deal goes with the tide. It is not unlike Telefonica’s buying Canal Plus a few years back,” said François Godard at London-based Enders Analysis.

In buying content companies, Altice has to either gain in subscriber market share or persuade clients to upgrade to more expensive content tiers. Neither has happened as yet in France, said Godard who added that, “to be fair, it’s still early in the implementation of SFR’s content approach.”

In Portugal, Portugal Telecom already shares crucial soccer rights with a telco rival.

If Altice’s strategy is to drive into premium content via Portugal, it will have far less competition than in France, where it faces the united opposition of Vivendi’s Canal Plus and Orange.

But returns from content investment in Portugal alone will be low-yield, Godard said. “The smaller the market, the tougher it is,” though Israeli telco Hot, owned by Altice, has a notable line in low-cost high-quality series production, he added. “Altice can learn from Israel,” Godard added.

Hence, Altice’s play in Portugal seems partly to be to use Media Capital, if the deal is waved through by competition authorities, as a beachhead for production for the Spanish, Portuguese and U.S. Latino markets, turning Plural, which already has offices in Miami, into a “global content production hub,” an Altice press release said.

Subscribe to Variety Newsletters and Email Alerts!

AdChoices
AdChoices

More from Variety

AdChoices
image beaconimage beaconimage beacon