Univision Sale Raises Concerns : Television: The presence of a Mexican magnate in investment group may affect the Spanish-language network’s programming balance, observers say.

In the early 1980s, when Mexican media magnate Emilio Azcarraga ran the Spanish-language television network now known as Univision, the lion’s share of programming originated in Latin America, with much of it produced at Televisa, Azcarraga’s own multimillion-dollar studio in Mexico City.

Since Azcarraga sold the network to Hallmark Cards Corp. in 1988, the number of American-produced programs has grown substantially to about half of what is available on the network’s nine television stations (which includes KMEX Channel 34 in Los Angeles).

Now, media watchers in the Latino community are worried that the 50-50 balance between U.S. and Latin American programs will be upset and could revert to the way it was a decade ago.

The reason: Hallmark’s April 8 announcement that it plans to sell the network and stations for $550 million to a group led by Los Angeles investor A. Jerrold Perenchio. Azcarraga is a minority partner in Perenchio’s group.

“If we had our druthers, it would be Perenchio by himself,” said a Univision employee who requested anonymity. “We have experience with Azcarraga already and so it’s almost as if Hallmark sold us to the enemy.”

Azcarraga--a media baron in the tradition of Rupert Murdoch and Robert Maxwell--has a near-monopoly on broadcast television in Mexico through his ownership of Televisa, the $2-billion Mexican-based production company that is the world’s largest producer and exporter of programming. Dubbed “el Tigre” in Mexico, Azcarraga also has a reputation for making and breaking Latin American television stars akin to the old Hollywood studio system of the ‘30s and ‘40s.

He was forced to sell Spanish International Communications Corp., the station group that became Univision, in 1986, after the Federal Communications Commission found him in violation of rules governing foreign control of broadcasting licenses. Under the new deal, Perenchio would own 75% of the station group and 50% of the network; Televisa and Venevision, a Venezuelan broadcasting company, each would hold 25% stakes in the network and 12.5% shares in the station group.

Nevertheless, Latino activists fear that, if the sale wins approval from the FCC, Azcarraga will try to return to his former practice of relying on cheaper Latin American programming or might even attempt to gain control of this country’s Spanish-language television in the same way that he controls Mexican television.

“Clearly the way (the network) operated before 1987 was to produce in Mexico and then recycle the product up here, which made our people second-class audiences twice: first, with the Anglo media and then with our own media as well,” said Felix Gutierrez, a former USC journalism professor who is now vice president of Freedom Forum, a foundation that gives grants to support journalism education.

“(Univision) had done some good things with domestic production and beefing up the news. That clearly has to be threatened now by the Azcarraga reconnection. Any time you can produce for pesos and sell for dollars, you have a real moneymaking machine. So I’m concerned. We were not making great gains, but at least we were moving on a trajectory to give people more access to our media--but that might be reversed.”

A spokesman for Perenchio and executives at KMEX and Univision said that there was no cause for alarm.

“After speaking with Perenchio, I realized he’s very sensitive to issues (of local programming) and I think we have made him more sensitive,” said KMEX General Manager Mike Martinez, who met with Perenchio last week. “He doesn’t find that in conflict to his own idea of taking this company forward. He’s a broadcaster. He understands the business. It’s his vision and not some representation of Televisa.”

Martinez added that the deal will open up more opportunities for Univision’s U.S.-produced programming to be distributed worldwide.

Perenchio could not be reached for comment. But Brian Regan, a spokesman for him, said that Perenchio’s 20-year track record in television attests to his commitment to Spanish-language television and to his business acumen.

Asked whether Univision could revert to mostly Latin American-produced programming, given Azcarraga’s involvement, Regan said, “At this point--and knowing there are many months of approvals and the whole process still ahead of everyone--I couldn’t commit to yes or no. But I will say (locally produced) news and public-affairs programming will most likely remain the cornerstone of the Univision programming.”

KMEX is one of three Spanish-language stations serving Southern California. The others are KVEA Channel 52 (owned by the Telemundo network) and KWHY Channel 22. If the sale goes through, it would merge Univision with one of its top competitors, the Galavision network, which is owned by Azcarraga and carried on KWHY.

“We don’t think (the sale) is a great idea. We are concerned about the lack of minority ownership in the United States and the lack of diversity of opinion,” said Esther Renteria, national chairwoman of the National Hispanic Media Coalition, based in Los Angeles. “Our Washington counsel is looking into how we go about opposing the transfer of ownership.”

But Azcarraga’s involvement in the Univision deal poses no apparent problems at the FCC. “A 25% alien investment in the parent of a licensee is consistent with the guidelines set in the statute,” said Stephen Sewell, assistant chief of the FCC’s video services division. “Assuming there are no other problems, or any other alien owners in there, there’s nothing that, on its face, raises a question.”

Univision spokeswoman Emma Carrasco said that network management has been assured by Perenchio that he does not intend to make wholesale changes in programming, personnel or philosophy.

“(Univision president) Joaquin Blaya is very committed to ensuring that the programming does not change,” Carrasco said. Fifty percent of Univision programming is domestically produced and 50% is purchased from Mexico and Latin America, and that’s the balance that this management team has sought to achieve. It is apparently what is working and I think Perenchio is interested in something that works.”