News Column

A Merger Mired In Controversy

July/August 2003, HISPANIC BUSINESS Magazine

Patricia Guadalupe

towerHBC.jpg

The proposed merger involving Spanish-language media giant Univision and Dallas-based Hispanic Broadcasting Corp. (HBC) has developed into an increasingly contentious issue for the Federal Communications Commission (FCC).

Univision, which owns 50 television stations nationwide and has interests in cable, the Internet, and the music industry, wants to add HBC's 63 radio stations in such important Hispanic markets as Los Angeles, Miami, and New York to its vast holdings.

Critics, including several Hispanic members of Congress, say the $2.8 billion merger would stifle competition and thus undermine the public information interests of the U.S. Hispanic community. Critics also point out that the newly created entity would control 70 percent of Spanish-language advertising dollars in the United States.

Citing just such concerns, the board of the National Association of Hispanic Publications voted in July to publicly oppose the merger.

Some legislators have alleged that the merger is part of a Republican plot to make inroads with Hispanic voters. It's been pointed out that Univision's chairman, Jerry Perenchio, is a registered Republican who has donated more than $1 million to GOP candidates in the past two election cycles. HBC CEO McHenry Tichenor Jr. also has given generously to Republican causes.

UNIVISION COMMON STOCK OWNERSHIP
Ownership entity Shares % of shares % of votes
Venevision*† 17,837,164 7.82 3.16
Televisa† 30,187,534 13.23 5.34
A. Jerrold Perenchio 37,687,384 16.52 66.31
*A trust principally for the benefit of the family of Gustavo & Ricardo Cisneros.
†Excludes 39.3 million shares of Class A, T, or V Common Stock issuable upon exercise of warrants held by Televisa and Venevision.
Source: Univision Communications Inc., U.S. SEC Form DEF 14A, filed 4/1/03.


Critics further claim that Univision is censoring news reports to allow more favorable coverage of President Bush and other Republicans and that the network has shut out opposing views in the controversial nomination of Miguel Estrada to the U.S. Court of Appeals at the behest of the White House. Univision dismisses the allegations, and Republican political operatives have labeled them "unbelievably ridiculous."

"It has no basis in fact and is completely unfounded," says Rudy Fernández, national grassroots director at the Republican National Committee. "That anyone would say that this would be about some alleged takeover by Republicans and conservatives to create conservative coverage is beyond any logic."

Former Univision president Henry Cisneros, who served as secretary of Housing and Urban Development in the Clinton administration, recently weighed in with a full-page letter -– sponsored by Univision – that ran in The Washington Post and The New York Times, disputing the claims by merger opponents.

"I saw no effort in my time at Univision or since to reflect any political bias in Univision's coverage of news and public affairs," he wrote, adding that while coverage of President Bush and the Republican-controlled Congress has increased, "President Clinton appeared far more frequently than did GOP leaders during the 1990s."

Univision officials also point out that half of its board and 80 percent of its employees are Hispanic, and that the CEO of its primary affiliate owner – Entravision's Walter Ulloa – is Hispanic.

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