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Univision, Si; Bush, No? - Broadcasting & Cable

Univision, Si; Bush, No?

Foes may pass on court to preserve campaign weapon
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By the Rule Book

Opponents of Univision's $3.5 billion purchase of Hispanic Broadcasting must decide which they want most: to stop the merger or to stop President Bush.

After the FCC's party-line approval of the deal last week, the merger's critics can either ask the FCC to reconsider its decision or file an appeal asking judges to block the acquisition.

Given the FCC Republican majority's unequivocal defense of their decision, there's almost no chance that they would back away from it. But, despite what many say would be a strong court case, opponents may choose to keep the proceeding at the FCC rather than risk court validation of the FCC and make the merger an issue in the 2004 presidential election—a vote in which Hispanic voters are expected to be critical.

"This merger will have negative consequences for Republicans," said Pablo Lago, a pastor who belongs to the Hispanic Religious Leaders of South Florida, during a press conference criticizing the deal sponsored by Lambda Theta Phi, the country's oldest Latino fraternity. Many of the Hispanic groups opposing the deal are non-partisan, but their strongest allies are overwhelmingly Democratic.

The deal combines the country's two largest Spanish-language TV and radio groups. The approval is sure to stoke the already enflamed debate over media concentration and will heat up the partisan battle for votes among the country's 38.8 million Hispanics.

"There are political reasons that may ultimately decide the next course of action," said Arthur Belendiuk, a Washington attorney representing some Hispanic groups that had sought to block FCC approval.

Keeping the battle at the FCC will focus opponents' attention on the Bush-appointed FCC and, by default, the White House.

Critics complain that the 45% of Hispanics who speak Spanish exclusively or as their primary language will have little alternative to Univision for news and entertainment.

"No English-language media company has anywhere near the influence of Univision," complained Consumers Union policy analyst Louis Figueroa. The FCC concedes that Univision's share of Spanish-language media is enormous. The Univision broadcast network airs all of the top 20 Spanish-language programs "virtually every week," according to the FCC's order.

Belendiuk predicted that a court battle against the merger would have a good chance of winning. The FCC went through "contortions" to make sure Hispanic Broadcasting investments in rival radio group Entravision as well as media giant Clear Channel's stake in Univision didn't count against local-ownership limits and also ignored previous FCC rulings that found the Spanish-language market to be distinct from the larger U.S. broadcast market. "Does anyone really believe Clear Channel/Univision/HBC and Entravision are going to compete against each other?" he asked.

The commission did, however, order Univision to unload two radio stations—one each in the Albuquerque and Houston markets—if a court upholds new restrictions on local radio ownership. Univision also must comply with an earlier Justice Department order to significantly reduce its investment in rival Spanish-language broadcaster Entravision.

Univision almost immediately closed the deal, announced in June 2002, and renamed its purchase Univision Radio.

The FCC's two Democrats argued that the deal should be blocked, saying Univision gains a "hammerlock" on Spanish-language news and entertainment. "This company is aptly named Univision— 'one vision'—because that's just about all we're going to get from Spanish-language media from now on," wrote Democratic Commissioner Jonathan Adelstein in dissent.

In rejecting the Democrats' plea to declare Spanish media a separate market from English, Chairman Michael Powell and his two GOP colleagues said such a "Balkanization" of the media market would corrode the notion of a marketplace of diverse ideas.

Leaders in the Hispanic community were split over the deal.

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