Univision, Televisa breakup likely to bring new programming - East Valley Tribune: Get Out

Univision, Televisa breakup likely to bring new programming

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Posted: Tuesday, August 22, 2006 6:34 am | Updated: 2:53 pm, Fri Oct 7, 2011.

MEXICO CITY - They were the ultimate power couple: Ambitious, successful and watched by the world. But mistrust, disagreements and jealousies began eating away at the relationship. Their breakup has millions of Spanish language soap opera fans wondering: What next?

The unhappy divorce of the top U.S. Spanish language network, Univision Communications, and Latin America’s biggest producer of hit shows, Grupo Televisa SA, was a plot lifted directly from the telenovelas that made both wildly successful. Now Telemundo, once relegated to a supporting actor role, is trying to win over viewers and emerge ahead of its rival, Univision.

The cliffhanger? The future of U.S. Spanish language programming, a market that has grown to more than 35 million Hispanics who make up at least 14 percent of the U.S. population and are driving the United States’ population growth. Analysts predict that advertisers will spend $1.4 billion this year to get their attention, a 10 percent increase over last year, and the competition among networks is expected to lead to more programming options.

This divorce started, as it would in most good soap operas, with a power struggle. The result could be more programming options for U.S. Hispanics.

Los Angeles-based Univision was looking for a buyer, and Televisa — already owning 11 percent of the company and supplying the network with much of its programming — began putting together a bid. But Televisa claims it was repeatedly shut out of negotiations.

When Univision’s board announced in late June that it had accepted a $12.3 billion offer from a consortium of private investors — most of whom probably never followed a telenovela in their lives — Televisa issued a terse statement saying it was ‘‘disappointed.’’

In response, the network threatened to sell its stake in Univision, which would free the Mexican broadcaster to look for business opportunities in the United States.

It also filed its second lawsuit in a little more than a year against Univision, looking for the right to distribute programming in the U.S.

The relationship had already begun to sour before the sale. In May 2005, Televisa sued Univision to get out of a 25-year licensing agreement that gave Univision the exclusive U.S. rights to the Mexican broadcaster’s programming. That trial is scheduled to begin in June.

Televisa telenovelas are wildly popular, airing in 50 countries on five continents, and making Mexican soap stars household names in China, Nigeria, and Uzbekistan. In the U.S., popular Spanishlanguage shows often beat their English-language network competitors.

‘‘The soap opera is what the audience most wants and is the most effective in terms of cost and sales, especially when they are produced in Latin America,’’ said Julio Rambaut, a former consultant to Univision.

‘‘For example, the Mexican soap operas have a big audience in the United States, but they are produced with pesos and sold in dollars.’’

If Univision doesn’t have access to shows like ‘‘La Fea Mas Bella,’’ or ‘‘The Prettiest Ugly Girl’’ — one of the most popular telenovelas in Televisa’s history — what will Univision put on the air?

Univision executives declined to comment for this article, but many speculate that the network will expand its original programming, much of it targeting younger, more assimilated Hispanics.

Televisa’s message to U.S. Hispanics? Don’t worry. We will come to you.

Alfonso de Angoitia, executive vice president at Televisa, told analysts last month that Televisa would use its ‘‘expertise, content and capital’’ to become ‘‘the leader in entertainment and information in the U.S. Hispanic market.’’

The network said it’s exploring distributing shows on the Internet, a delivery method that is still only reaching a small percentage of the market.

Other rumors abound: the creation of its own U.S. Spanish language channel, or even a surprise partnership with an English-language network, or a potential an agreement with Telemundo — although Telemundo says that isn’t being considered right now.

Televisa executives also haven’t ruled out a new offer for Univision. Univision expects to close the deal with the private consortium in May.

Some blame bad blood between Emilio Azcarraga, Televisa’s chairman and president, and Univision Chairman and CEO A. Jerrold Perenchio.

The two never hit it off, and their relationship became especially strained in May 2005, when Azcarraga resigned from Univision’s board to protest Perenchio’s decision to hand-pick the company’s next president without consulting Azcarraga.

Others say U.S. regulations prohibiting foreign ownership of U.S. networks could complicate any deal.

As Univision and Televisa wage their battle, the Hialeah, Florida,-based Telemundo also is plotting its future.

The No. 2 U.S. Spanish language network, a unit of NBC Universal Television Group, has signed an agreement with Yahoo in May to broadcast sporting events, music and other entertainment on the Internet.

Telemundo also is trying to revamp its programming to appeal to both newly arrived immigrants as well as secondand third-generation Hispanics, many of whom speak a mix of English and Spanish and want more contemporary Spanish language programming.

‘‘I think the future of Hispanic television is great,’’ Telemundo president Don Browne told The Associated Press.

‘‘Nothing underlines that more than the fact that Univision was just sold for $13 billion, and I think that speaks very loudly about how important Spanish television is.’’

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