THE SKEPTIC Admira's Soap Opera May Run And Run

By Robert S Duncan

24 January 2002

Dow Jones International News

A DOW JONES NEWSWIRES COLUMN

"Like sands through the hourglass, so are the days of ..."

Admira?

Yes, Telefonica SA's (TEF) media unit could soon be making soap operas.

Admira, along with Disney (DIS) unit Buena Vista International, is forming a Latin American film production company called Miravista. The 50-50 joint venture will target audiences in Mexico and Brazil.

While the JV will initially focus on movies - the first being "Ladies Night," a romantic comedy set in Mexico - it is also studying the possibility of making "telenovelas," or soap operas.

Don't knock it.

If Miravista really is interested in soaps, then it's smart to be wooing the Mexican market: Mexico is "queen" of "telenovelas", successfully exporting the product to a seemingly insatiable market of Latino addicts all over Latin America, the U.S. and Europe.

And maybe Admira could also draw on its own experience, which has all the necessary elements of any good soap opera:

It's been through an identity crisis - Admira was formerly-known as Telefonica Media; there's intrigue - top management was recently reshuffled with a banker now heading the company; there's innuendo - continued rumors of possible asset sales; there's a love-hate interest - potential investors are reminded of the delayed IPO; and there are possible white knights - including Bertelsmann AG (G.BRT).

The tale of Telefonica's ex-CEO Juan Villalonga is also reminiscent of a daytime TV drama.

Not too long ago everybody was singing his praises, and it was under his guidance that Telefonica became one of the first European players to try to meld telecom and media interests, going on a buying spree in Europe and Latin America.

But then Villalonga fell from grace and was forced out by allegations regarding stock options, the cold shoulder from former friends in government, and frosty relations with large institutional holders.

After Villalonga's mid-2000 exit the company was left with a hodge-podge of assets that investors and analysts are demanding be consolidated - hence the creation of Admira.

As it stands now, the unit finds itself with many diverse holdings: From Antena 3 TV, to satellite pay-TV unit Via Digital, to Dutch TV production company Endemol, to film companies Lola Films and Patagonik in Argentina.

Analysts say Admira should seriously consider getting its house in order so that it can catch what's expected to be an upswing in the sector.

An Admira spokesman, however, said the company isn't planning to consolidate its Latin American assets in the Miravista venture.

That suggests that, just like the fictional ones, Admira's soap opera could drag on and on.