Leading U.S. Hispanic net Univision has fired another salvo in its ongoing battle with its key program supplier, Televisa.
In a countersuit filed in Los Angeles District Court against the Mexican media giant, Univision accused Televisa of a string of bad-faith actions that have upset its programming and its relationship with advertisers.
Aug. 15 suit reflects the partners’ deteriorating relationship, which came to a head when Univision chairman-CEO Jerrold Perenchio tapped Ray Rodriguez as prexy and chief operating officer without consulting Televisa and other shareholders in February.
Televisa immediately banned its talent from participating in Univision programs (Daily Variety, Feb. 14).
Long list of grievances
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Univision cited this action among its grievances, which include overbilling on production costs; barring Univision reporters from Televisa events; revealing telenovela finales on Televisa talkshows and news segments that air on Univision’s cable/satellite web Galavision; refusing to edit programs to conform to U.S. standards; and refusing to remove advertising and product placements that are inappropriate for broadcast in the U.S. and violate Univision guidelines.
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No figure for damages was given in the complaint.
Televisa chairman, CEO and prexy Emilio Azcarraga, who has made no secret of his desire to gain more control of Univision, resigned from the board of directors in May when his company filed suit against Univision.
In July Televisa exec VP Alfonso de Angoitia told analysts the two nets were not talking and that Televisa had added two claims to its $1.5 million lawsuit against Univision over allegedly unpaid back royalties in a California court.
De Angoitia said Univision had altered soccer programs “in ways not permitted” by an agreement and that Univision had violated an agreement to give Televisa unsold ad time.
“The Univision suit reflects the poisonous working atmosphere between the two managements,” said Wall Street analyst Phil Remek of Guzman & Co.
On sabotage mission?
“Given the nature of the revelations, it makes you wonder if Televisa is trying to sabotage its U.S. outlet,” he added. “Is Televisa just throwing its weight around or is it planning a hostile leveraged buyout of Univision? Or could it be just a couple of schoolboys fighting, given the petty nature of the complaints?”
U.S. caps media foreign ownership at 25%. Azcarraga has property in Miami and his wife and son are U.S. citizens.
“He could put the company in his son’s name,” said one observer.
Alternatively, Azcarraga could form a consortium with U.S. partners to take over Univision. Televisa owns a 10.9% stake in Univision, and its programming supply pact expires in 2017.
Meanwhile, Univision stock dipped to $26.50 on Thursday from $27.50 last Thursday. Remek pointed out that Univision stock has been stagnant for nine months, mainly because of weak ad revenue growth.
But perception is everything.
Univision execs, who are banned from dealing with Televisa talent, will find it tougher to negotiate talent fees and staff salaries are likely to be frozen.