Televisa and TV Azteca Hit Hard By Court Ruling

Mexico´s Supreme Court took a chainsaw to a law providing sweetheart treatment for Televisa and TV Azteca. Both broadcasters, under legislation passed last year, were granted automatic renewals of twenty-year television licenses and digital television rights at no cost. In effect, they were granted de facto ownership of the public airwaves in saecula saeculorum. Under several preliminary rulings last week and this week those prerogatives have been resoundingly overturned. Still pending is a ruling on the provision concerning foreign ownership of Mexican radio and television outlets.

For purposes of this blog, the decision is of great importance because the Mexican and U.S. Hispanic television markets are inextricably linked. Televisa provides programming on an exclusive basis to Univision, which is and will remain the market leader as long it airs Televisa-produced telenovelas.

Telemundo, which is a distant second to Univision in ratings and revenue, believes it must have a broadcast presence in Mexico in order to effectively compete in the U.S. Hispanic market. The belief is

counter-intuitive but perhaps accurate.

After all, Univision succeeds because Mexican immigrants bring with them to the States a taste for Mexican television programming. Telemundo figures it needs to acquaint future Mexican immigrants with its programming before they cross the border. I am sure Telemundo executives would not put it so coldly but that is, in effect, the gist of their argument as to why they want to operate a network in Mexico.

And the Supreme Court rulings enhance the likelihood of a Telemundo bid for a broadcast license in Mexico. Even without a bid, the rulings will definitely create competition for the existing duopoly of Televisa and TV Azteca.

Not surprisingly, Televisa and TV Azteca downplayed the Supreme Court rulings in this evening´s newscast. I am sure the story will be top of the fold in all the major Mexican dailies. Televisa, however, didn´t mention the story until twenty minutes into its newscast. Azteca didn´t report the story until almost forty minutes into its newscast.

Both networks have a history of slanting editorial coverage to suit their own institutional interests.