Univision, Televisa Settle Dispute
Pair Drops Lawsuit; New Deal Runs Through 2017
Mike Farrell -- Multichannel News, 1/22/2009 2:46:15 PM
Spanish-language broadcasting powerhouses Grupo Televisa and Univision Communications Thursday said that they have settled their years-long programming dispute, agreeing to a new deal that increases payments to Televisa.
According to several published reports, Univision agreed to pay Televisa about $585 million in the settlement -- $25 million in cash, plus advertising time worth $65 million a year through the life of the deal.
Univision would not comment on the reports.
"This was truly a mutually beneficial agreement," a spokesperson for the network said in a statement. "The cash and EBITDA impact to Univision from the settlement is minimal."
According to the parties, the new agreement, terms of which were not disclosed, will run through 2017 and will include a simplified royalty payment that will result in increased payments to Televisa in exchange for incremental rights for Univision. The two companies said that litigation between the parties under way in Los Angeles federal court has been settled and will be dismissed.
"We are pleased that today's settlement concludes this time-consuming litigation," the companies said in a joint statement. "This settlement serves the best business interests of both Televisa and Univision. It assures the public that Univision will continue to have access to consistently top quality Hispanic programming. It enables Televisa to continue utilizing Univision's extensive television networks as an important distribution channel for its content into the U.S. marketplace."
"For Univision, it assures that there will be no disruption in some of its most popular and valuable programming, as well as affording Univision an ongoing pipeline of future content developed by Televisa," the statement concluded.
Televisa, based in Mexico City, produces telenovelas and other popular programming for Univision, the largest Spanish-language broadcaster in the U.S.
The dispute goes back to 2005, when Televisa filed suit in U.S District Court for the Central District of California, alleging Univision's failure to pay royalties and unauthorized editing of certain Televisa programs. The trial began on Jan. 6 of this year.
Adding fuel to the dispute was Univision's decision to put itself up for sale, which Televisa-an early bidder for the broadcaster-claimed would void its programming agreements.
Televisa later said that Univision owed it about $118 million in unpaid royalties, primarily for unsold commercial time used by Univision subsidiaries. So far, Univision has paid about $20 million of that amount under protest.
Univision was sold to a group of investors including Saban Capital Group, Madison Dearborn Partners, Thomas H. Lee Partners, Providence Equity Partners and Texas Pacific Partners in 2006 for $13.7 billion.
In a separate deal, Televisa will license to Univision the home games for the three Televisa-owned teams-America, Necaxa and San Luis- for 2009.
As previously planned, the United States Internet rights to Televisa programming will be adjudicated in a federal district court in Los Angeles in March 2009.
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