Thursday, March 27, 2003

Esta fusión es mala!

The Justice Department is getting in the way of the planned merger of Univision and Hispanic Broadcasting Corporation (HBC), two of the nation's largest Spanish-language broadcasters. In an odd twist, the DOJ is forcing Univision to divest its 30% interest in a third company—Entravision Communications—as a condition of permitting the HBC acquisition. The government argues that since Entravision and HBC directly compete in some radio markets, it's unfair that Univision should own a stake in both companies.

The terms of the DOJ's forced "consent decree" is particularly harsh. Univision must surrender its two seats on Entravision's board of directors, and must exchange all of its voting stock "for a nonvoting interest with limited rights." This is so, in the DOJ's words, Univision won't try to "improperly influence" Entravision's radio business.

As usual, the government admits they consider the interest of consumers—in this case purchasers of radio advertising—more important than the rights of producers. That's hardly news. But what is notable is that radio mergers are gaining more attention now from antitrust regulators and members of Congress. Sen. Russ Feingold, Wisconsin Democrat, is shilling legislation to impose new federal limits on the number and size of radio stations one company can own. Even Hispanic activist groups, such as the National Hispanic Policy Institute, are demanding the DOJ act to ensure more "local ownership" of Spanish-language radio and television stations. NHPI recently ran a series of newspaper ads touting 90% support in the Hispanic community for "local ownership" of radio stations. If that is the case, then why isn't this 90% putting together some capital to actually buy their own radio station? I guess it's just easier to try and take somebody else's through regulation.

No comments: