Issue of Equity

Telefonica SA
2 August 2000

A SIGNIFICANT EVENT

TELEFONICA, SA., in accordance with that stated in article 82 of the Spanish
Stock Market Law and that set forth in the Circular Letter 14/1998, of December
28th, hereby informs the Spanish Securities Commission of the following:

'Telefonica, S.A.' has today executed the resolution on its increase in share
capital, approved by the General Shareholders' Meeting held on April 7th of this
year.  The capital increase has been totally subscribed and paid in through
non-cash contributions in the form of 'Endemol Entertainment Holding, N.V.'
shares, in order to address the exchange set forth for the acquisition, through
a tender offer, of these same shares.

As a consequence, 213,409,097 'Telefonica, S.A.' ordinary shares have been
issued, with a nominal value of 1 euro each and an issue premium of 2.875 euros
per share, which will be delivered to those 'Endemol Entertainment Holding, N.V'
shareholders that have accepted the tender offer.

'Telefonica, S.A.' will now hold shares representing 99.2% of the share  capital
of 'Endemol Entertainment Holding, N.V.'

'Telefonica, S.A.' will immediately take the necessary steps for these new
shares to be listed on all the stock exchanges where it is already present.

Madrid, August 2nd, 2000


SPANISH SECURITIES COMMISSION
-MADRID-