In a subpoena received this week, the Publicis Groupe agency is asked to disclose information about media bought for its clients on Univision's TV networks for the last 10 years. Delving into the Hispanic agency's records escalates the ongoing battle between Univision and Grupo Televisa, the Mexican media giant that is Univision's biggest program supplier and a failed bidder to buy the U.S. company.
The news broke on U.S. Hispanic web site HispanicAd.com on Friday.
Grupo Televisa has filed multiple lawsuits in Los Angeles courts against Univision regarding a long-term agreement to supply programming to Univision until 2017. The most recent suit, filed in Los Angeles Superior Court in July, seeks the right to distribute online the TV programs Televisa currently supplies to Univision starting Dec. 19. Earlier litigation, pending in U.S. District Court in Los Angeles, Televisa alleges breaches in the Program License Agreement by Univision. Univision has countersued.
Complying with subpoena
A Bromley spokeswoman confirmed the agency received the subpoena and said the agency will comply with it. Bromley, 49% owned by Publicis, is one of the largest U.S. Hispanic agencies and works for Procter & Gamble, the biggest Hispanic advertiser, Nestle, Continental Airlines, Coors Brewing Co. and Payless Shoe Source.
A Univision spokeswoman declined to comment. Televisa executives did not return phone calls.
One of the provisions in the lengthy Program License Agreement stipulates that Univision will pay Televisa 7.5% of "combined net time sales," defined as all-time sales after expenses, such as advertising commissions. The agreement also says Televisa has the right to a yearly certificate from an independent accounting firm attesting to the combined net time sales for the year.
Televisa's offer to buy Univision earlier this year was rejected in favor of a $12.3 billion bid by a consortium of private equity firms approved by a slim majority of Univision shareholders in September. Televisa plans to sell its 11% stake in Univision, valued at approximately $1.1 billion.
Earlier this week, Televisa announced its third-quarter 2006 financial results and attributed an increase in sales partly to growth in royalties paid by Univision under the Program License Agreement. During the third quarter, Univision paid royalties to Televisa of $34.6 million, up from $27.8 million during the same period in 2005, according to Televisa.