Sky’s layoffs to join forces with Izzi take their toll on Televisa’s finances

Televisa Group, one of the telecommunications giants, detailed in its financial report that its expenses rose from 194.8 million pesos to 529.6 million pesos, on an annual basis, due to severance pay for staff reductions at Sky, its satellite pay television company.

Since last year the company began a restructuring of its companies, but in this semester it has focused its attention on Sky’s asset to unite it with Izzi in order to create a new player in the fixed segment. This plan has involved massive layoffs.

Francisco Valim, CEO of Izzi and Sky, for example, revealed in a conference with analysts in April of this year that the structural integration of Izzi with Sky contemplated eliminating up to 16% of the satellite television company’s workforce.

The structural integration of both assets will allow operational savings of up to 400 million pesos in the second half of the year, according to Televisa in a conference call with analysts on the occasion of its first quarter financial results.

But these movements have also brought losses in sales. From April to June of this year, Grupo Televisa billed 15.72 billion pesos, which implied a fall of 5.8% compared to the 16.693 billion pesos. This result was mainly associated with the decrease in sales in its Sky segment.

“In addition, revenues from our mass market operations fell 3.8%, mainly impacted by the proactive purge of the subscriber base that took place in the third quarter of last year,” the company explained in its financial report issued to the Mexican Stock Exchange.

Operating cash flow (EBITDA) also suffered a setback. The company reported 5,329 million pesos, which meant a 12.4% decrease compared to the 6,085 million pesos reported in the same period of the previous year.

The company’s financial results reflect the complexities it is facing in the fixed market, which has been impacted by the arrival of streaming platforms such as Netflix and Disney, gradually removing the relevance of pay television.