News for North Texas
Play Live Radio
Next Up:
0:00
0:00
Available On Air Stations

Univision and Hispanic Broadcasting: Will It Happen?

By Maxine Shapiro, KERA 90.1 Commentator

Dallas, TX – Mergers and acquisition: a component of free enterprise. Unfortunately, they can sometimes bring out the not-so-pretty side of our competitive nature. I'm Maxine Shapiro with KERA Marketplace Middays.

So yesterday it was announced that Univision Communications, Inc. had agreed to acquire Dallas-based Hispanic Broadcasting Corp. for, oh, about $3.5 billion in stock. This little union would merge the nation's largest Spanish-language television group, Univision, with the biggest Spanish-language radio group, Hispanic Broadcasting.

Understand, this merger does not make a Viacom. But it is very significant - especially in the growing Spanish-language media. Enough for rival Spanish Broadcasting System, Inc. to file a federal antitrust lawsuit against Hispanic Broadcasting. As reported in today's Wall Street Journal, this lawsuit among other things accuses the company of attempting to "damage relations with banks and investors." Now, here's where it gets sticky. The San Antonio-based radio conglomerate Clear Channel is also named in the lawsuit. They own 26% of Hispanic Broadcasting. Clear Channel told the Federal Communications Commission "that it does not take a hand-on role in Hispanic Broadcasting." And regulations forbid them to take an operational role. But not so, says Spanish Broadcasting Systems.

One of the claims in the lawsuit details top Clear Channel executives telling an investment banker at Lehman Brothers that a Spanish Broadcasting executive was a "drug user and/or drug trafficker." The lawsuit suggests that this is an "attempt to discourage the banker from working on Spanish Broadcasting's initial public offering." Clear Channel denies all accusations.

When word got out yesterday about this lawsuit, Univision stock dropped 15%. This might put a little damper on the merger. And some in the know are expecting General Electric, owner of NBC, owner of Spanish-language network Telemundo, to also formally object to this merger. You know, nothing's easy anymore. But the question being asked, as the Journal put it, "Whether regulators and the courts will consider Spanish-language media as a distinct market, separate from English-language competitors." We'll see. For KERA Marketplace Middays, I'm Maxine Shapiro.

Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 P.M.