Mediaset Espana Comunicacion SA

MAD:TL5

Earnings Call Transcript 2019-Q3

[Operator]

Ladies and gentlemen, thank you for standing by, and welcome to the Mediaset España Third Quarter 2019 Results Conference. [Operator Instructions]I must advise you that this conference is being recorded today, Wednesday, the 30th of October 2019. And now I would like to hand the conference over to your speaker today, Head of Investor Relations, Mario Sacedo. Please go ahead.

[Mario Sacedo Arriola, Head of Investor Relations]

Good evening, everybody. Welcome to 9 months 2019 results presentation of Mediaset España Comunicación. Let me introduce you to today's speakers. The presentation will be hosted by Massimo Musolino, General Operations Manager. After the presentation, we will be opening a Q&A session hosted by Massimo Musolino; Quico Alum, Publiespaña's General Manager; and Javier Uría, the group's Chief Financial Officer. They will answer all your questions. Massimo, you have the floor.

[Massimo Musolino]

Good evening, everybody. Thank you for joining our 9 months 2019 results webcast. We will take a look at the main aspects of the operational and financial figures that we released to the market just now, and then you can ask any question you may have in the Q&A session at the end of my presentation.Let's take a look at Mediaset's main figures for the first 9 months of the year on Slide 2. On the right-hand side of the slide, you can see how our leadership in audience was confirmed once again with a remarkable 28.8% in total individual, a 2.3% gap compared to our main competitor in the period. According to Infoadex, in the first 9 months of the year, the audiovisual market decreased by 2.3% to EUR 1,976.3 million, and Mediaset España's market share was 32%. The same source stated that the TV advertising market declined by 6.3%, with Mediaset España reaching a market share of 43.3% in the period. This figure represents over 200 basis points more than our main competitor. Looking now at the financials on the left-hand side of the page, you can see that our total net revenues reached EUR 660.7 million, while EBITDA for the period stood at EUR 203.9 million with an EBITDA margin of 30.9%, an increase of more than 300 basis points versus last year. Cash flow generation is one of the key pillars of our business and amounted to EUR 168.1 million in the first 9 months of the year. Cash conversion remains high, close to 90% versus EBIT. Finally, earnings per share excluding treasury shares went up about 11.7% to EUR 0.50. On Slide 3, you have the evolution of the monthly audience from January to September for both the group and the main channel, Telecinco. On the left-hand side of the slide, you can see we achieved the largest gap between Mediaset España and Atresmedia Group without sporting events. And once again, we led audiences to the 28.8% in total individual to September, which is a 2.3% lead over our main competitor. The performance evolution is improving month-by-month, thanks to the success of our programming lead, which led to a 400 basis points gap in September, one of the biggest differences recorded in a year without sports events. You can see similar trend in the main channel figures, where Telecinco widened the gap with Antena 3 by nearly 4 percentage points in September. October's preliminary figure confirmed that this positive evolution is continuing, bringing Mediaset España closer to our annual target of being the leader in both audience and advertising market share in the Spanish market as we have been for the last 7 years. We will go into more details later but the excellent audiences in prime time and the strength of our daytime programs have allowed us to continue making huge cost savings in the programming grid. From an advertiser's point of view, TV remains key and well above other methods of creating successful marketing campaigns. For example, a few days ago, we welcomed the research results from one of the big 4 consultancy companies, where they pointed out that 30% of the auto sector's sales are directly linked together with the advertising campaign. Moving now on to Slide 4, you can see how our TV advertising revenues evolved during the period. We posted a 6.5% GRP volume decline in the period due to weaker TV consumption figures. In terms of prices, we saw a more negative performance of 0.3%, which, if we exclude the 2018 World Cup effect, is equivalent to a 2.8% increase, in line with our expectation and the price policy. As you can see in the center of the slide, our policy of increasing prices remains on track. Mediaset España TV advertising revenues decreased by 7.1% versus last year's figures, reaching EUR 612 million. Once again, as in the previous quarter, the main expectation comes from the presence of the World Cup event in the comparison there. We turn to Slide 5, review of a visual explanation of the company's effort to adjust operations to the audiovisual market's new reality. TV advertising revenues are and will be the main driver of earnings and profits, but other sources of revenue are gaining traction in a steady manner, such as digital income, which has grown by 38% in the 9 months period, including advertising and other revenues generated by the Web. Other revenues grew by almost 13% driven by the Mediterráneo business. In the period, content sales to third-parties are almost doubling due -- from the same period last year. No TV advertising revenue in the 9-month period represents more than 10% over the total net revenues of the group. This context of developing new business lines that are capable of producing extra revenues [ listing ] from TV advertising revenue, we have launched our SVOD platform, MiTele Plus, our pay OTT service. NIUS, digital news side, and uppers, which we will explain in more detail on the next slide. Turning now to the next slide, the Slide #6. You can see that we have had a very busy summer. There has been a lot happening with our new digital initiatives. Let's look at MiTele Plus, one of the new offers created by Mediaset España to better the viewer's experience through different distribution channels and therefore generating new revenues. It was launched on July 22 as an upgrade to our AVOD OTT platform, MiTele, and it is now available on Samsung, LG, Vue, Chromecast, Android TV, [indiscernible] and Amazon, [ FileSeeker ] name just a few. We are also working on making it available on PlayStation 4 and Apple TV by the end of the year. The initial set was by paying EUR 2.50 a month, you can watch the same content of AVOD without interruption. A few weeks later, mid of July, we include sports content after we acquired the distribution rights of MovieStar TV's football channel, LaLiga, Champions League and Europe League matches, generating another level of subscription, EUR 35 per month for the whole football package. The new series, No sueltes mi mano, was exclusively previewed on the MiTele Plus platform 48 hours before it was launched on one of our channels, on the movie channel. Today, we are happy with the launching of the new service, which accounts for more than 90,000 subscribers. In July, we had the arrival of uppers, Mediaset España's new information and entertainment website targeted at senior audience, which is growing strength. Today, accounts for around 700,000 monthly unique users. Also in September, we launched NIUS, our digital news site managed by a large group of Mediaset España journalists with a focus on political and economic information and the main national and international events. These 3 new digital initiatives pushed Mediaset to its highest-ever number of unique users in September with 17.9 million (sic) [ 17.6 million ]. This represents a 59% increase against the same period of last year, 59%, 5 9 percent increase, a huge increase. On Slide 7, you can see the results of all these digital achievements improved by our new initiative, reached a record high in terms of unique users in September with 17.6 million. In order to maintain a like-for-like comparison when we look at the 9-month period, we can see the 50.2% growth in the unique users over the last 3 years, so larger and more attractive content. The increase is even more remarkable in terms of video consumption, where Mediaset España ranked, as of September, just behind bigger native digital players. Mediaset España achieved a gap of 1/3 more than our main competitor, bringing us a clear growth opportunity in the coming months for advertisers who are finding a larger reach in their campaign. Moving on to the financial review on Slide 8. You can see total cost for the period amounted to EUR 456.8 million, which is a 9.1 point decline versus the same period of last year. The savings have mainly been made in the programming grid, both sports rights and programs, and in cost of sales due to the lower third-party advertising revenues and finally due to the less movies premier in the period. In terms of results, the adjusted EBITDA for the period increased by 5.3% to EUR 203.9 million. This figure is an improvement in the margin of more than 300 basis points to 30.9%. This number makes our company, Mediaset España, one of the most profitable European broadcasters despite the market conditions in the first 9 months of the year. Once again, it's remarkable how we improved the audience and the profitability with 0 cost inflation in the business, proving the business resilience in a challenging environment, thanks to the cost flexibility and top line diversification. Concluding this presentation, I would like to give you an outlook for the rest of the year on Slide 9, where you have the update targets. In operational terms, we maintained our key target of leading both audience and advertising market share in Spain. We consider this achievement to be a requirement for completing our main target, which is to attain the highest profitability of Spanish media players and top of the class in the European market. After the remarkable quarterly performance in terms of cost and the programming grid we have played for the last quarter of the year, we can now give you a new cost guidance of EUR 690 million, excluding the PPA amortization. Of course, Mediaset España is keeping an eye on the market in order to adapt the cost structure and programming grid to the changing advertising market conditions. Regarding non-TV activities, we are expecting a higher contribution from sales and distribution content and also digital business, both with positive EBITDA contribution. I would also like to remind you that we will premiering a new movie in the mid-November, next week, that we hope will further increase the double-digit growth in other revenues. Finally, let me update you on the current status of the MFE deal. You will have seen that the Spanish court suspended [ reneging ] the resolution regarding the merger pending a legal decision on the substance of the claim. Therefore, we will file a claim in the case that the court's decision will be overturned as soon as possible. Almost 6 months have passed since the announcement of the transaction, and so we are more convinced than ever of the need to transform the broadcaster business model at an international level. Something which, under today's market conditions, is becoming more urgent and necessary. It's up to the court now to decide when our appeal would be dealt with. We hope that it will happen fairly quickly. Anyway, we are still working hard to prepare the transaction, so that is the interim measure, at least we are ready to move forward immediately. And now let's move to the Q&A session. Thank you.

[Mario Sacedo Arriola, Head of Investor Relations]

Thank you, Massimo. This is the end of our presentation. We are now ready to take all your questions. Operator, please, let's proceed to open the Q&A session.

[Operator]

[Operator Instructions] And the first question comes from the line of Julien Roch from Barclays.

[Julien Roch, MD & European Media Analyst]

My first question is, can you give us the advertising trend in Q4, so October and November, that's my first question. The second one is, if advertising is down, say, 5% in 2020, so next year, another poor market, how low can you go in terms of cost? Because many times you told us, well, now, we've reached a cost level, and every time advertising is worse, cost becomes lower. So EUR 690 million, can you do EUR 680 million, EUR 670 million, EUR 660 million, EUR 650 million? And that's my second question. The third question is EUR 80 million of P&L rights investment over the first 9 months of 2019 but EUR 144 million of programming CapEx. So can you explain the gap between the two? EUR 64 million is quite a lot. What would it be for the full year? And what about 2020? Those are my 3 questions.

[Quico Alum, General Manager of Publiespaña]

Okay. Good afternoon. About the market, I believe our numbers are clear. Our estimation, internal estimation is the market in total is decreasing by 3.5%, 4%, around this number. We don't know exactly that number, but we think the market will decrease about this number. The good news in October is the automotive sector has been active again and also telecom is performing well. Another excellent issue for us is the toy sector is going to grow. But as you remember, as you know, we have a kid channel that, for us, is very important. In the negative side for the October, we have a food and beauty sector that is decreasing. And for us, our concern in this case is beauty sector, that is going to be really important in our underlying December. And the investment in this sector is concentrated in 5, 6 clients, and we are still negotiating with 2 of them. For that, I mean we expect that, in November and December, the market will be better than in October. But for that, it's essential to continue raising prices if we want the market to grow, have to do that of the audience of the companies in this market because it's really, really essential for that.

[Julien Roch, MD & European Media Analyst]

Sorry, Quico, did you say the market was increasing or decreasing in October by 4%?

[Quico Alum, General Manager of Publiespaña]

Decreasing by 4%. I mean around 4%, I don't know exactly the number. Around 4%. And we think -- or we hope -- we expect that in November and December, we are still negotiating some important campaigns because you have to take into account that in November and December, the main investments are concentrated around that prior and Christmas period. And for Christmas period, let's say the usual issue is 1 week, but for Christmas period, we have also -- we have still 3 or 4 negotiations open, and we have to close this kind of negotiation mainly in the beauty sector. Therefore, what we think that the November and December are going to be better than October has been. But I cannot give you an exact figure because, honest, I don't know the exact figure for that.

[Massimo Musolino]

Julian, for the second question, we are now preparing our 2020 budget, so I cannot now tell you now which is our cost base, cost guidance for next year. What I can say that, next year, we will have something new, a little better this year. First of all, we will broadcast the Europe Cup -- the EURO Cup 2020 during the summer. This will be an extra cost for our programming grid. But of course, it will be also an extra revenues. I'm going to take in revenues. Secondly, as I said during my presentation, this year, the movie activity has been poor, only 2 movies premiered during the year. Next year, we have a budget to premier at least 4 movies. Also this will be higher cost but higher revenues. And generally speaking, I think that the project for the next year is to continue improving of the new revenue line that we are developing. So I don't know if the TV advertising market will go up or down next year, I think that this is something that we'll analyze only at the end of this year. But it's clear that we expect to increase the other revenues line, and we hope that it will be enough to balance or to compensate part of the advertiser revenues trend.

[Julien Roch, MD & European Media Analyst]

But I guess, if you don't want to communicate around the budget for next year, which I can understand. And my question was more a theoretical question, right? If the market is really, really weak, how low can you go in terms of revenue? Or is there no bottom? If advertising is down 5% every year for the next 5 years, then your costs will always be down and your EBITDA will always be flat?

[Massimo Musolino]

Of course, there is a limit, there is a floor in reducing costs because the risk is -- it's pretty easy to save money, we don't broadcast in any program, but it is the [ quickly ] way to kill the business. So how much can we continue to reduce this, it's a theoretical question. We will try to reduce our cost basis up to a level which is not dangerous for our business.

[Francisco Javier Uría Iglesias, Chief Financial Officer]

And your third point, Julien, well, it's never a rule of thumb that you're going to have the same investment or the same OpEx in any given year. For instance, in this year, we had more movie investment, while, at the same time we had only 2 movies which have been launched in the year. So this has been -- in terms of movies has been more of an investment year, and that's why you have a little bit more of investment. There's a significant higher level of investment than what you have in OpEx for the films which have been released. So that -- this is the first point, that is not a like-for-like thing. And secondly, you have a seasonal impact here. If you look at this rate at the end of September, you're always going to see that there is more investment than OpEx, and that's due to the fact that most part of the third-party rights normally begin at the beginning of a year, and you get most part of that in the early months of the year. And this gap that you have at the end of September normally tends to stabilize by the end of the year. And that being the case, that gap that you see this year, that you could have seen last year, for that matter, as well, is going to be reduced by the end of the year.

[Operator]

And the next question comes from the line of Annick Maas from Exane BNP.

[Annick Tonie Maas, Analyst]

My first question is under fully OpEx for this year. What's the ad market assumption that you have behind that OpEx number? As in, if the ad market is worse in November and December, is there scope to go potentially EUR 10 million lower or not? Second one is on MiTele Plus, you mentioned that you have 90,000 subscribers. Can you please give us the mix in between basic and premium subscribers? What's the renewal rate of those since August? And also, can you tell us if you have any intentions to invest into extra content for MiTele Plus? And then finally, if you could give us the digital revenue number for Q3, that would be great.

[Quico Alum, General Manager of Publiespaña]

We -- the [indiscernible] market for the fourth quarter, we are working further with a minus 4%, and November and December, more or less around this number. We think that this could be better as long as we are working with this number.

[Massimo Musolino]

What I can add is that when we have prepared our programming grid for the last quarter of this year or quarter, we have prepared a lineup that enables us to maintain our leadership in the audience served. Just to give you an idea, we have a number of large sports events such as the MotoGP race in November, 2 football matches, so there's been a national under 20s team plus 4 matches for the European Cup to qualify. We have on air in this quarter, 2 new additions of the successful reality shows, like Celebrity Big Brother and Got Talent, and then we have new game shows on Cuatro. So a good lineup, a good programming grid for the last quarter. And according to the information that we receive every day from our commercial team, we will try to verify it, depending on the advertising market trend. It's clear that we are at the end of the year, so we have a limited range of action. But in any case, we will try to do our best. Talking about our MiTele Plus, our pay OTT, we actually did, in October, 90,000 subscribers. Of course, according to our commercial policy, all these more than 90,000 subscribers are subscribers of the basic. More or less 80% of them are subscribers also of the football packaging. I remind you that the moment we have -- our commercial offer is composed by 3 different offers, there is a packaging of the full football, Europe League, Champions League and Liga. Then we have the option -- the second option with only the Liga matches, the first and the second division. And there is a third option, which is the packaging of only the Champions League. At the same time this week, we have launched a series channel in the pay-TV, so you can watch, at a price of EUR 2.5 a month, fiction in the series. And then we are preparing many other channels because, as you may know, next May, when the football season will end, we expect the normal part of our subscribers want to renew their subscription. At this moment, we need to be ready to offer them other content. Something we have, which is the EURO Cup. Of course, our project is to [indiscernible] the EURO Cup matches on free-TV, but probably impossible to create some products related to the EURO Cup that can be -- sell to MiTele Plus. And at the same time, we are working in preparing other channels. So I think that this will be a main activity for the next year for us.

[Francisco Javier Uría Iglesias, Chief Financial Officer]

In terms of the digital revenues in the quarter, we're talking about some around EUR 10 million, and that includes -- most part of that number will be internet advertising revenues, and a small part of it will be the new OTT platform internet revenues by way of the subscription rates. So this will increase what we have in the quarter for a total number in the first 9 months of the year, which will be some EUR 25 million, of which a significant part of this, some EUR 21 million, something like that, is the internet advertising revenues, and the other will come from the OTT platform.

[Operator]

And the next question comes from the line of Richard Eary from UBS.

[Richard Eary]

Just 2 follow-up questions. Just on the back of -- on the digital question. You said now, it's EUR 25 million for the first 9 months, EUR 10 million in the third quarter. Obviously, given the launches that you've announced, are we thinking that is going to be at least another EUR 10 million or plus in the fourth quarter? So that would take digital numbers up to EUR 35 million, maybe even EUR 40 million for the full year. That's the first question.

[Francisco Javier Uría Iglesias, Chief Financial Officer]

Okay. Yes. Well, What I have said is this should be split into 2. Well, the EUR 35 million, of course, the most important part of it is the internet advertising revenues, which are growing at a very good pace. The other will be the Internet-related other revenues, the most significant part of it is the OTT platform. And of course, the numbers that we have in the OTT platform until the end of September is the initial part of it because it's the first month, 1.5 months. Of course, in the fourth quarter, these OTT revenues are going to gain some traction, and they're going to get to higher numbers. So we hope by the end of the year, first of all, that the internet advertising revenues are going to be proceeding at the same pace that we have seen already. And in terms of the OTT revenues, growth is going to go up because of the fact that the Spanish League season and the Champions League are going to be in full activity, and normally, that's going to increase the number of subscribers.

[Richard Eary]

Okay. That's helpful. The second question just comes back to the movie activities. You mentioned, obviously, this year, has been poor with only 2. And next year, you've got at least 4 movies. What should we think about in terms of the total contribution this year for other revenues, and from -- within that, how much we should think about from the cinema activities?

[Francisco Javier Uría Iglesias, Chief Financial Officer]

This year, we have 2 films. And therefore, we will have a contribution that is free -- if you make a comparison for what it's worth it with last year, they are some EUR 4 million less. But like I said, this is not a linear kind of activity. Last year, we have more films. This year, we have 2. And of course, we don't know what kind of result we're going to have with the new launches this year. But all the case being equal, we might expect that the revenues are going to go back to something similar to the levels that we had last year, in which, if I'm not wrong, 4 films were launched. So we're likely to go back next year to a level which will be in line with what we have experienced in 2018.

[Richard Eary]

So just to be to clear, just in terms of total other revenues for the year, what number should we be thinking of based on the fourth quarter?

[Francisco Javier Uría Iglesias, Chief Financial Officer]

For next year, next year?

[Richard Eary]

This year. For '19.

[Francisco Javier Uría Iglesias, Chief Financial Officer]

Well, for this year, the only thing that is missing now is the film that we're going to launch now and -- I mean we don't know, the film has not been launched. It's going to be launched in 2 weeks or something. So we really don't know, in terms of revenues, what the contribution of that will be. We could be -- we could have some -- we could shed some light after the first week of release and so on. But at this point in time, we're not in a position to shed any light in that respect.

[Richard Eary]

Okay. Just one final question, just coming back to the court case issue. I mean you mentioned in your opening remarks that you thought -- you said it was up to the courts and you were hopeful of something happening fairly quickly. How do we monitor that process? And what are the things that we should look for?

[Massimo Musolino]

The court has suspended the decision of our AGM. And now we are presenting an appeal, and we are waiting the decision of the provincial court if they decide to move on the process. We cannot do anything, only wait, continuous working in all the other activity because you can imagine that the project, the deal is not easy because there are the usual organizational [ rules ] of both companies. So we are working -- we are not losing time, we are working in the activities that we can continue doing and wait. So this is the current situation.

[Richard Eary]

So if the deal gets blocked by the provincial court, what happens next?

[Massimo Musolino]

We are not contemplating the situation now, we consider that there are mutual reasons for the merger. And at the end of the day, we will be able to close the deal according the conditions that we have transmitted to the market.

[Francisco Javier Uría Iglesias, Chief Financial Officer]

So if I might add something, what this court is going to decide on now, it's not on the substance of the case. What it's going to decide only is reduced suspension, which has been ruled by the first court, is going to be sustained or not. So it's not something that implies that they're going to get into the whole substance of the case. It's just looking at the issue and see whether or not they uphold what the first court said or they decide what it will be. That's all that they have to deal with at this stage.

[Operator]

[Operator Instructions] And the next question comes from the line of Stefano Gamberini from Equita SIM.

[Stefano Gamberini, Analyst]

Just a clarification on this appeal. If I understood correctly, your appeal is on the suspension of the ruling not on the actual approval of this ruling or not by the high court. So if this is correct, it is not that the high court will cancel the suspension and then you can go ahead with the deal. Just could you help us understand what could happen if, in the future, the decision of the court will be anyway against of this new deal even after the merger? Just my other question is mainly a little discount where the stock is trading right now compared to the parity with Mediaset in the deal that is in the region of 14%, just how you can explain this difference if it's not related to this suspension from the Madrid court?

[Francisco Javier Uría Iglesias, Chief Financial Officer]

What the local said was to suspend the agreements of the General Assembly of the 4th of September that had to do with the merger, right? So this is just the suspension. It is just a time delay. They don't get into the issue of whether or not there was something in the transaction that should be [indiscernible] a time delay. And what the higher court is going to decide on right now and what we're going to appeal against now is whether this suspension makes sense or not. This is what we're going to appeal and if this is the whole issue which is going to be discussed, but it only has to do with the suspension though. That, right now, implies only a time delay, nothing to do with the final transformation or anything to do with the merger. It's a time delay based on the decision by the low court that we want the higher court to rule on. And they could only do 2 things, either they stand for -- with what the locals said, or they decide that this is not right, and they say, okay, there is no suspension anymore and all the agreements which were recorded at that General Assembly are still on and therefore you can go ahead with the transaction. That's the outcome, either one of them, which could take place. And of course, we hope and think that we're going to be appealing in a sense that there is no way it doesn't make any sense that those agreements are -- have been suspended and therefore we have all the agreements for the higher court to rule against that and give a green light to the transaction.

[Operator]

And the next question comes from the line of Remi Grisard from Société Générale.

[Remi Grisard, Equity Analyst]

Two questions from my side, please. The first one, can you please explain a bit in more details the financial mechanism for the football rights in the MiTele offer? I understood that, the first year, it is like variable costs and then it would become more fixed because they are held by Telefónica? Out of the EUR 35 per month, how much do you pay in costs for football? And are you sure to stop or to continue next year? That this my first question. And the other question is would it be possible to get an update about the other court case that you have about competition, which was announced by the smaller channels? Should we still expect a sign? And when will we get the answer?

[Francisco Javier Uría Iglesias, Chief Financial Officer]

Okay. On the first issue on Telefónica. Of course, we don't say how much we paid to Telefónica, which they have to put this right into the market for antitrust consideration. So we are -- based on the price that they offered, we felt that it was a good opportunity and how we think that -- are we doing right in terms of the number of new people and so on. So we think that, that is a good opportunity. And based on the cost that -- based on the price that we have to pay to them, we think that is a good proposition, and it is going to work out fine. But that's all we can say now.

[Massimo Musolino]

In terms of...

[Remi Grisard, Equity Analyst]

I'm sorry, it's fully flexible? I mean you don't take any risks the first year. You pay a price per subscriber, so it would be only positive?

[Francisco Javier Uría Iglesias, Chief Financial Officer]

You have to pay the price, and it's up to you to do your business, organize your business in a way that you make it profitable, which is exactly what we're doing now.

[Massimo Musolino]

About the CNMV, we have not yet received the final notification from CNMV. However, we consider that we haven't done anything wrong or no anticompetitive conduct leading to a breach of the law has taken place for our side. So when we will receive it, we will review and then we will appeal. We see clearly that we haven't done anything wrong. This is something that we have discussed in this call last quarter. And we are sure, we are pretty sure that our position is stronger. They cannot demonstrate anything because we haven't done anything. We sell advertising. As usual, we were selling the same way that we sold 5 or 10 years ago. We sell advertising in the same way that in other countries other broadcasters sell. So we'll wait and then we will decide how and when to appeal. But in any case, and since, at this point, we see something, in my opinion, a wrong decision by them because there is a point, a key point in my point of view, it is they continue talking about the TV advertising market, which is something old. Now the market is not made only by broadcasters. There are too many other relevant players, all the new digital giants, and that we -- all these players competing in a bigger market. So it's no sense to look only at the TV advertising market, and this is a mistake that they need to modify in their way to look at the market.

[Operator]

So the next question comes from the line of Richard Eary from UBS.

[Richard Eary]

Sorry, just to ask a question on clarification. When you were saying that October was down minus 4%, and you were budgeting -- your working assumption was minus 4% for the fourth quarter, was that just on the TV numbers? Or was that including the advertising that sits within digital? So I just want to make sure that I'm comparing apples with apples.

[Quico Alum, General Manager of Publiespaña]

Yes. When we are talking minus 4%, we are talking about TV advertising market. There's no digital market in the local...

[Richard Eary]

So that doesn't include the advertising that you talk about in terms of the EUR 10 million that was in the third quarter? That is separate.

[Quico Alum, General Manager of Publiespaña]

No. No. That does not include internet advertising, it's only TV.

[Richard Eary]

Yes. Okay. That's what I thought. I just wanted to double check.

[Operator]

And there are no further questions at the moment, so please go ahead.

[Mario Sacedo Arriola, Head of Investor Relations]

Okay. As there is no more questions waiting to be answered, and now it's time to close this conference call. Thank you very much for attending our presentation. If you have any further questions, please don't hesitate to contact with Investor Relations department. Goodbye.

[Operator]

That does conclude our conference for today. Thank you for participating. You may all disconnect.