As of December 31, 1997, Televisa had received deposits of about $836.5 million using year-end exchange rates for the peso. In December, rival broadcaster TV Azteca announced its own pre-sales of about $310 million for 1998.
Under Televisa's French plan, advertisers are required to commit and pay for 1998 advertising during the fourth quarter of the previous year, though they can buy additional ad time during the year. Traditionally, most of Televisa's TV ad spend is derived from the French plan.
TV Azteca offers a cost-per-rating system, which Televisa does not. Televisa's results "were slightly below what the market was expecting," says Merrill Lynch analyst Pablo Riveroll. "It doesn't include the World Cup season, which sort of, but not fully, compensates for the perceived reduction or weakness."
Televisa noted in a late January 15 statement that the 1998 pre-sales do not include deposits for World Cup 1998 advertising. The two-month event is expected to attract advertisers in droves in this soccer-crazed market.
Riveroll attributed the shortfall in deposits in part to the effect of the Asian crisis. "Advertisers were slightly pessimistic following the Asian crisis in the fourth quarter of 1994 and don't want to commit as much right now," he says. "We will likely see top-off and ad-ons during the year, depending on the economy."
Televisa says it is "satisfied" with the results given competition in the ad market and the impact of the Asian financial crisis. It says it expects ratings success, the World Cup and 1998 political campaigns to translate into additional ad revenue during the year.
Televisa also announced January 15 a shake-up in its news programming, with Monday January 19 marking the last show of veteran newscaster Jacobo Zabludovsky. TV Azteca has deeply cut into Televisa's news ratings and the number- two broadcaster has the top rated news program, "Hechos."
Copyright January 1998, Crain Communications Inc.