UPDATE 2-Mexico's Televisa sees weak TV sales, eye on Univision

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By Cyntia Barrera Diaz

MEXICO CITY, Feb 22 (Reuters) - Mexico's Televisa sees meager revenue growth for its core television broadcasting business this year as it awaits a key ruling from a U.S. court that could free it to sell content to whoever it wants.

Televisa (TV.N) (TLVACPO.MX), known around the world for its tear-jerker soap operas, expects television broadcasting sales -- mostly advertising -- to rise 4.5 percent, barely above inflation expectations, this year, Executive Vice President Alfonso de Angoitia said on Friday.

Anticipating an economic slowdown, many advertisers have trimmed the amount they spend on television marketing.

Televisa is looking for new ways to grow its sales, including plans to sell lottery tickets. The company is producing the second season of its El Pantera -- The Panther -- action series shot in 35 mm movie format.

It is also co-producing popular soap operas for French and Chinese audiences.

"The 2008 upfront (advertising) season decreased 3.2 percent in real terms compared to the previous year, confirming the high level of uncertainty," Morgan Stanley said in a report.

The start of the year is an example of the tough times ahead.

"In the first quarter we will have an unfavorable comparison as Easter falls in March," Televisa's De Angoitia said. "As a result of that, and the market in general, we expect first quarter sales of the television broadcasting segment to be approximately 5 percent lower."

In 2007, Easter, when many Mexicans go on vacation far from television screens, was in April.

Televisa is also tangled in a legal battle with key U.S. partner Univision Communications Inc., trying to pull out of a programming deal that does not expire until 2017.

The deal currently bans the Televisa from selling content to parties other than Univision. The trial in Los Angeles, California, is set to start April 29.

"What we are claiming, as a result of material breaches by Univision, is that the program license agreement should be terminated immediately," De Angoitia said. "If we were to win the lawsuit, we would be free to do whatever we want with our content in the U.S. territory."

The executive did not rule out a new deal with Univision, the leading U.S. Spanish-language broadcaster, if they win the case.

Televisa plans to invest $360 million in 2008 to expand several businesses, focusing on its satellite operations.