Televisa would reduce corporate expenses for the spin-off of the sports business and lotteries

The split that will Televisa Group of several of its businesses would reduce the costs of the telecommunications company, the company’s executive co-president, Alfonso de Angoitia, assured in a conference with analysts.

To the express question of whether it makes sense to assume that the spin-off will generate a greater reduction in Grupo Televisa’s corporate expenses, the executive replied: “I think it is safe to assume that, yes.”

The businesses that Grupo Televisa will spin off are the América soccer club, the Azteca stadium, the games and raffles division, as well as the magazine publication and distribution business. All of them will be grouped in a new public company that will be listed on the Mexican Stock Exchange (BMV), de Angoitia said.

“As a result of the Televisa-Univisión merger, after that, it did not make much sense to keep the other businesses under the umbrella of the group, so we want to simplify the structure of Grupo Televisa (so that it is only) a telecommunications company and operator of cable”, De Angoitia explained.

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He said forming a separate company will allow the spun-off businesses to have a more strategic focus and (greater) flexibility.

Of course this group will have a dedicated management team. I think it will be a smaller company, but it will be a very good sports and gaming company,” he stated.

He believed that the market does not give much value to Grupo Televisa’s “Other Businesses” division, “that is why we believe that with these components more value can be generated as an independent company”.

He explained that the spun-off businesses represent 7.8% of Televisa’s total income, as well as 3.4% of its operating flow (EBITDA).

Asked why the company did not choose to sell the separate divisions (as it has done with other of its businesses in the past), he replied: “We believe that it is faster for us to spin off these businesses, so that we can concentrate 100% of our attention in Sky, Izzi and in our position in Televisa-Univisión”.

The director explained that of the subsidiaries that will be spun off, only the Azteca stadium will need considerable investments in the future, since it will have to be remodeled for the matches that it will host in the 2026 World Cup (organized jointly by Mexico, the United States and Canada).

He clarified that Televisa will not transfer part of its debt to the new company, which is expected to reach the BMV until 2023.

In its report for the third quarter of 2022 to the BMV, Televisa announced that its board of directors approved the proposal to reorganize the company through the spin-off of the aforementioned businesses.

Emilio Azcárraga’s company explained in its report that the reorganization will be subject “to various conditions, including compliance with applicable laws, as well as obtaining the required corporate and regulatory authorizations, and the approval of the spin-off by the shareholders’ meeting of the Company. He trusted that the split process will take place in the first half of next year.