Signs unprecedented exclusive deal with Azteca

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MEXICO CITY -- Unilever in Mexico - one of the nation's top five advertisers - is to pull its advertising out of Grupo Televisa and broadcast its commercials exclusively on upstart Television Azteca during the whole of 1997, starting in January. The announcement of the unprecedented arrangement is the latest and most powerful salvo in a war between the two TV networks. Televisa has long dominated broadcasting in Mexico, where it is the largest media company. Azteca launched only three years ago as a product of President Carlos Salinas de Gortari's privatization program.

Olevander Straaten, the German president of Unilever's Mexican operation, claims, however, that Azteca is Mexico's broadcaster of the future. Neither he nor Azteca would reveal the size of the contract.

A spokesperson for Azteca says Straaten and Ricardo Salinas Pliego, president and major shareholder of the TV company, are well acquainted with each other and that Salinas Pliego played a major role in negotiating the contract with Straaten. J. Walter Thompson, a Unilever ad agency, could not be reached for comment.

Azteca points to the fact that, unlike Televisa, it bases its commercial rates on program ratings. Also, it bills its clients every three months, while Televisa charges for the entire year. It claims some advertisers are beginning to rebel against Televisa.

When Azteca began broadcasting in 1993, it had very few advertisers apart from Elektra, a chain of electronic retail outlets owned by its President Salinas Pliego. Today it adds Unilever to such international heavyweights as Coca-Cola, Nestle and Proctor & Gamble. Its advertising revenue for 1996 is expected to produce net earnings of $70m. The Salinas Pliega family (no relation to the president) bought the channel in July 1993.

Televisa claims to be the world's leading producer and broadcaster of Spanish-language TV programs, the leading publisher of Spanish-language magazines, one of Mexico's largest music recording companies, Mexico's largest radio broadcaster, and majority owner of Mexico's largest cable system.

Its 1995 net sales were $1.18bn at today's exchange rate, despite the Mexican economy's collapse which was provoked by the peso devaluation of December 1994. Its 1995 net income actually increased in 1995 and its rated share of the Mexican television audience was 81% in 1995.

However, both its audience share and its net income declined in 1996. It reported a $53.3m loss in the first quarter.

Copyright October 1996, Crain Communications Inc.

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