* 9-mo net 32.16 mln euros vs Reuters poll avg 107 mln
* Expects clearance for deal with Prisa before year-end
* Rival Antena 3 says open to mergers, not in talks
* Sees 8-12 percent rise in TV ad prices in 2011
* Antena 3 shares close up 4.2 pct, Telecinco up 0.5 pct
(Adds Antena 3 conference call, closing share prices)
By Elisabeth O'Leary
MADRID, Oct 28 (Reuters) - Spain's largest private TV company Telecinco announced a surprise fall in nine-month net profit, hit by an impairment charge for its stake in the struggling maker of the Big Brother TV show, Endemol.
Investors homed in on robust advertising revenue at the Mediaset unit, up more than half in the third quarter.
But company executives told a conference call that advertising could not be expected to grow at the same clip over the rest of the year, after a boost from one-off factors including Spain's summer triumph in football's World Cup.
Telecinco's results compared with a forecast-beating 231.8 percent rise in 9-month net profit at nearest rival Antena 3.
Antena 3 management were also cautious about the outlook for advertising for the rest of 2010.
"For the second half of the year, the (TV ad market) will be flat in a worst-case scenario, so we expect growth of between 3 and 5 percent for the full year," Antena 3 chief executive officer Silvio Gonzalez told analysts during a conference call.
Gonzalez said he expects a rise of between 8 and 12 percent in TV advertising prices in 2011, compared with about 20 percent so far in 2010.
Antena 3 shares closed up 4.27 percent at 7.08 euros, while Telecinco rose 0.50 percent to 8.57 euros, in line with the rise in the blue-chip IBEX.
ENDEMOL SAGA ENDS
Having first said Endemol would be one issue taken into account when Telecinco sets next year's dividend, Managing Director Massimo Mussolino clarified his comments, saying Endemol was not a cash payment.
"We can assume there is no impact (from Endemol) on dividend policy," he told a conference call. The company has a 100 percent dividend payout policy.
Profit at Telecinco was depleted by the 89 million euro Endemol charge, a full write-off of the investment.
Endemol has been struggling with a 2.3 billion euro debt pile dating back to a 2007 buyout.
Net profit at Telecinco fell 48.3 percent to 32.16 million euros ($44.41 million), versus poll expectations for it to almost double to 107 million euros.
The group's operating performance beat expectations, with revenue rising 44 percent in the nine-month period, although Telecinco spoke of "uncertain" economic conditions.
Citigroup analysts noted Telecinco trades at a large premium to its peers.
"We find the premium difficult to justify based on macro uncertainty, upwards cost pressure and regulatory benefits well known and priced in. Mediaset offers a better way to play the Cuatro/Digital+ transaction as it faces no dilution from the deal," according to a research note.
Mussolino said the company still expects competition authorities to clear its agreement with Prisa to buy TV channel Cuatro and a stake in Digital+ before the year-end.
Antena 3 is still open to sector mergers, but is not in any specific talks, a company executive told analysts.
The broadcaster was in merger talks with La Sexta in the first half of the year, but these broke down due to a disagreement over future control.
($1=.7242 Euro)
(Reporting by Elisabeth O'Leary; additional reporting by Judy MacInnes; editing by David Cowell, Michael Shields and David Hulmes)