Argentine Soccer TV Scandal Prompts Raids

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Buenos Aires, Argentina-Police raided and searched the offices of the country's dominant cable duo, as well as those of sports-media outfit Torneos y Competencias S.A. (TyC), following accusations of corruption in the awarding of soccer TV rights.

The police action is the latest chapter in an ongoing saga over soccer rights that has taken on a highly public and, according to some, vengeful dimension.

Spokesmen from MSOs Cablevisión and Multicanal would not comment on the investigation other than to clarify that their broadcasts of international matches involving Argentina would not be affected by the proceedings. TyC officials did not return calls seeking comment.

The high-profile investigation centers on whether the longtime president of the Argentine Football Association, Julio Grondona, received illegal kickbacks from the AFA's awarding of TV rights to the 18 matches Argentina must play against regional rivals to qualify for the 2002 World Cup.

The rights were awarded to TyC last year and henceforth parceled out to Multicanal and Cablevisión, which transmit the home games on pay-per-view tiers.

The 17-building police raid, which included the homes of Grondona and TyC founder Carlos Avila, was reportedly ordered after a former TyC employee accused the soccer-association chief of amassing a fortune that was incompatible with his declared income.

A Peronist Party congressman later backed up those claims, and added that the AFA's decision a few years ago to award TyC the television rights to local tournament play through 2014 was also highly suspect.

Grondona's defendants said the raid was politically motivated, however. The outspoken official reportedly called the Congress a "den of thieves" after the lower House voted unanimously earlier this year to require the games to be televised live on broadcast TV, effectively nullifying Multicanal's and Cablevisión's exclusive contracts with TyC.

Although the Senate failed to ratify the highly politicized bill, and no action was taken against the MSOs, the legislation stirred public outrage against the cable operators for charging for games that were previously available free of charge on broadcast TV.

The thorny issue of whether or not to uphold the two MSOs' contracts with TyC to broadcast the games has also wound up in the courts, where the outcome has been equally bizarre.

Last month, TyC presented video recordings made with a concealed camera that showed a federal judge attempting to extract payment from a TyC lawyer in exchange for a favorable ruling. The judge, who claimed that he was coerced, later resigned his post following the release of the embarrassing tapes to the local media.

Even stranger, some independent media sources claimed that Multicanal's owner, local media giant Grupo Clarín, could be the driving force behind the anti-cable movement.

A return of the games to broadcast TV, Clarín's core business, would help to reduce financial pressures on cash-strapped Multicanal as it searches for a strategic partner in order to stay even with the lately more aggressive Cablevisión.

Spanish telco giant Telefónica S.A.'s pending departure from Cablevisión would give control of the country's leading MSO to Dallas-based investment fund Hicks, Muse, Tate & Furst Inc. and AT & T Corp. subsidiary Liberty Media International Inc. The two companies remain partners with Telefónica and Avila in TyC.

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