Eight weeks after the FCC approved media-ownership rules that could change the English-language media market, the prospect of the FCC's ruling on this new issue is provoking a debate that goes beyond advertising, with implications for politics, news coverage and Hispanic ownership of media and programming.
Univision already owns or sells ad time for TV stations that control close to 80% of Spanish-language TV audiences and ad dollars. Besides the main Univision channel and second channel Telefutura, Univision owns the biggest Hispanic cable channel, Galavision, and the largest Web site, Univision Online. Buying Hispanic Broadcasting would add 65 Hispanic-directed radio stations, most airing Spanish-language programming.
The debate centers on what this would mean.
Opponents like NBC's Telemundo Networks, radio rival Spanish Broadcasting System and the National Association of Hispanic Publishers say the deal is different from English-language media deals, where consumers and advertisers can simply switch channels. Spanish-speaking Americans would have little choice but Univision, which could push a political agenda-perhaps one supported by pro-business Republicans-as well as drive up ad prices and drive out rivals.
"We think it would be the equivalent of Viacom buying Clear Channel and maybe throw in NBC, AOL online and Sony Music," said Steve Mandala, exec VP-sales for Telemundo.
Univision, of course, doesn't see it that way. Univision contends there isn't a separate Spanish-speaking market since most Hispanics switch between Spanish- and English-language media. Seen that way, Univision's share of the overall media market is tiny and the radio deal would help Univision compete against other media conglomerates for ad dollars aimed at Hispanics.
Douglas Kranwinkle, Univision's general counsel, said the FCC has repeatedly said Spanish-language is a format, not a market, and he denied Univision would use its power to influence news coverage or hike ad rates. "There is a huge gap between the rates we have been able to charge and what non-Hispanic networks can charge and we have a lot of unsold inventory," he said.
Despite the furor, the attempt to define Spanish-language media is unlikely to be a deal-breaker. The Justice Department approved the deal as long as Univision reduces its 30% stake in its biggest affiliate. And the FCC is considered likely to approve the deal, perhaps as early as this week.