Power Rangers buy Univision, seriously; Televisa bails

Televisa v.s. Univision, Business Week. Very good article, I recommend it.
History of Univision.

Back in September 2006, Univision was purchased by a group of private investors for 12.3 Billion dollars. The group of investers was headed by Haim Saban, the man that gave the world Power Rangers. Emilio Azcárraga, owner of Televisa, had his bid rejected by Univision president/owner Jerrold Perenchio. Perenchio then seemed to back track a little when the bidding period was extended; either to allow Televisa to make a counter offer, or join Saban’s group of investors. Televisa pulled out of negotiations and stated that they would “look in a different direction.”

Televisa was 11.4% owner of Univision right up until the sale. Televisa will now look into a different direction to continue its aspirations of infiltrating the U.S. market. Televisa and Univision will continue to be attached at the hip by an agreement that gives Univision the exclusive right to transmit Televisa-produced content in the United States. Televisa is the largest producer of Spanish content in the world.
Back in May of 2005, Televisa sued Univision. Televisa’s claim is that Univision has failed to pay full royalties for Televisa-produced content. Univision’s response is that they had made overpayments to Televisa in previous years.
From the point of view of analyst, Televisa has a legitimate complaint and has a good probability winning its case.
Ana Gabriela Ocejo, analyst for Scotia Bank Inverlat, stated that if Televisa wins the case, they will be able to renegotiate the current Univision-Televisa agreement to increase the amount of future royalties. The royalties currently received by Televisa seem meager given the tremendous popularity of Televisa-produced programs and “novellas” (soap-operas).

In 2005, Univision unilaterally decided to reduce the amount of royalties paid to Televisa. Furthermore Univision seized payment on non-recurring television specials produced by Televisa, such as Premios Lo Nuestro, and various musical specials. The stop-payment seems odd given that Univision had been paying for these specials for the last 14 years. In addition Televisa claims that in the same year, Univision began “modifying” Televisa-produced programming, in violation of the Televisa-Univision agreement.

Televisa also asserted the right to distribute its content online and prevent Univision from distributing Televisa-produced content online. Univision’s right to distribute Televisa-produced content online expired December 19, 2006. Televisa moved to assert itself as the only online distributor of its own content.

So what does this have to do with Soccer???
Everything! For starters Forbes reports that there is a completely different pact that allows Univision to broadcast Televisa produced soccer games. That pact is set to expire December 2007. Chivas have already signed a U.S. TV deal that gives Telemundo the right to broadcast Chivas home games on U.S. airwaves beginning in 2008. See my other post about Chivas’ new TV deal. By losing Televisa-produced soccer games, Univision will miss out on all Club America, Necaxa, and Club San Luis home games as well as any other team who has a contract with Televisa. This is most likely the reason Univision has just inked a deal with Soccer United Marketing in which Univision will carry 25 MLS games a season, 10 U.S. National Team games and 5 International Friendlies. The Univision-SUM deal began this year and will last until 2014.

Currently the Televisa-Univision case has been postponed until January 15, 2008. Televisa has filled 111,140 pages worth of documents for the case and has petitioned the U.S. District Court in Los Angeles to subpoena records from sponsors like Coca Cola, Procter & Gamble, Lexicon and Wal-Mart in order to show that Univision has made “tremendous” profits advertising these companies’ products on Televisa-produced shows.

Whatever the outcome of the court case the Univision-Televisa partnership has most likely been severed beyond repair. I expect that Televisa will most likely seek a temporary partnership with NBC Universal’s Telemundo, which will probably halt NBC’s attempt to infiltrate into Mexico and create a third major network in Mexico. If Televisa can’t gain full control of Telemundo, I expect them to seriously begin considering forming a 4th major Spanish network in the U.S.