MADRID � The Spanish government has relaxed its TV ownership regs for European Union and Spanish companies, opening the door to further media concentration as the recession decimates the profit margins of the local networks.

The rulings also restrict non-EU companies� shareholdings in Spanish TV companies. These will reflect ownership limitations imposed on Spanish companies in the foreign companies� countries of origin.

New legislation permits EU companies to own majority stakes in multiple broadcasters � as long as the webs� combined Spanish TV market share doesn�t exceed 27%.

Prior rulings limited a shareholder in one network to a maximum 5% stake in a second TV station.

Big moves in Spain by non-EU players � taking stakes in a couple of big broadcast networks � look unlikely.

�With TV ad revs dropping 30% on a year-to-year basis this month, you can�t possibly go to a bank and say �I want to buy a Spanish free-to-air television station,� � an analyst commented.

The regs, approved by royal decree Friday, look likely, however, to help rationalize Spain�s heavily overcrowded digital terrestrial TV sector.

Twenty national and 49 regional DTT channels operate in Spain, according to DTT trade org Impulsa TDT.

The new regs allow Spain�s big national broadcasters to buy stakes in small DTT operators, allowing them to use their DTT channel bandwidth for HD simulcasts of the broadcasters� core channels. An HD channel occupies equal bandwidth to three to four DTT services.

Emiliano de Pablos contributed to this report.