Atresmedia Corporación de Medios de Comunicación, S.A., is a Spanish media group, mainly present in the television by owning Antena 3, the most watched TV channel in Spain, and also other industries such as radio and filmmaking. On the other hand, Mediaset S.p.A. is an Italian mass media company that is the largest commercial broadcaster in the country but also operated in Spain as one of the industry leaders.
Atresmedia has been competing fiercely with Mediaset for decades forming a duopoly in the Spanish media industry. In the case of Atresmedia, the company has been successful by taking two programs named Pasapalabra and The Voice, traditionally broadcasted by Mediaset, and changing a downward trend in terms of audience to make both grow year over year. Both programs maintained their essence, but at the same time changed several mechanisms and other key elements such as presenters or coaches till reaching a brand new image and revitalizing them.
In general, programmes audiences tend to decrease over the years as any form of entertainment eventually loses its attractiveness, some new ones end up substituting the old successful ones by achieving better audiences. Exceptionally, some tend to enlarge their lifecycle several years but it is quite difficult to sustain the numbers demanded within the prime time window and some end up moving to other times when competition is not that hard. Therefore, it is quite remarkable how Atresmedia has been able to revitalize these programs while maintaining them in the prime time scene.
Besides, their programs portfolio has low turnovers in windows with less competition. Antena 3 programs such as El Hormiguero, Carlos Arguiñano, Tu Cara Me Suena, or La Ruleta de la Suerte are staying after more than a decade since its inception, and almost any kind of entertainment series such as The Simpsons or The Big Bang Theory in its entertainment channel named Antena Neox.
In terms of promotion, the company has executed very creative strategies such as broadcasting The Voice castings on YouTube to boost engagement or using programs such as Pasapalabra or El Hormiguero to invite other new TV presenters to them with views to promote these other programs and increase their visibility, and ending up revaluing them further.
In the last two years, Atresmedia has been able to start beating Mediaset in terms of audience, especially in Prime Time with those new acquisitions. Although Mediaset cannot be only valued in terms of the Spanish media because it also leads the industry in Italy, the current valuation multiple for Atresmedia is around 6x P/E ratio while Mediaset is far above around 10x P/E ratio. From a long-term perspective, some investors might argue the possibility that Atresmedia and its channel Antena 3 can stay as a media giant within the Spanish competitive environment in the long term due to its expertise to take and revitalize programs with great audiences from other TV channels, and especially also sustain the ones outside Prime Time very consistently with a very low turnover. Both aspects along with a solid financial position shown by its Balance Sheet give the company enough credibility to stay as an industry leader in the long term, and an interesting alternative to value investing investors, who can buy Atresmedia shares during market downturns and by this way benefiting from those market overreactions while still earning an attractive dividend every year.
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