For Sale: Mexican TV Network. Needs Work. : Media: Privatizing apace, the government wants to unload a broadcast web. Whether competition results depends on the buyer.

Televisa, Mexico’s only commercial television network, could have some serious private sector competition before long for the first time in 20 years.

Since the government announced Sept. 14 that it would sell one of two state-owned national TV networks, speculation about potential buyers has centered on everyone from coffee growers to Japanese makers of high-definition televisions.

But the strongest contenders are the most obvious ones: radio networks; Multivision, a year-old subscription television service in the Mexico City metropolitan area that uses signal scramblers, and, of course, Televisa itself, the closely held network that already controls four broadcast TV channels transmitted across the country and the nation’s major cable franchise.

Whoever wins control of the government-owned TV network, known as Red 7, will need to make huge investments, analysts cautioned, if it is to be a competitive commercial broadcaster.

Red 7 is little more than a television frequency with a few transmitters. It depends on its sister network, Red 13 Imevision, for most of its broadcast and production facilities.

The two government networks share 58 channels that reach 70 million viewers, about 85% of the population. Seven hours a day, half of Red 7’s on-air time is classroom instruction at the junior high school level. The rest is a mix of cultural programming--mainly documentaries and talk shows--and entertainment, largely sports, old movies and cartoons.

Televisa programming is concentrated on soap operas, musical variety shows and skit-based comedies. The network has exclusive contracts with most major Mexican entertainers, and that places serious limitations on a potential competitor’s options for developing programs that could attract viewers and advertisers, analysts said.

The privatization of Red 7 “is going to be a real challenge,” said Raul Trejo Delarbre, a media researcher at the National Autonomous University of Mexico (UNAM), who has written extensively about Televisa.

Still, the chance to buy a national television franchise is an exciting opportunity, he added. “If they do not sell it to Televisa, it will be the first time that the neo-liberal concept of free market competition comes to (Mexican) television,” he said.

Televisa officials have not commented publicly on whether they are interested in acquiring the network. Other potential bidders are only slightly less cautious.

“We are definitely interested in buying, but we cannot say more until we know the price,” Diana Sanchez Mujica, spokeswoman for Multivision, said.

However, media sources said Multivision owner Joaquin Vargas has strong hopes of buying Red 7 and is gearing up production to provide programming for the network. He has the advantage of already owning a production house, called Telerey, and the Multivision studios.

Vargas ran Mexico City’s last independent TV station until it was sold to Televisa in 1970. His family also appears to have good relations with the government.

The Wings restaurant chain that the Vargas family owns has the concession for cafeterias in government-owned airports and recently got a government concession to operate Del Lago, a prestigious restaurant in Mexico City’s famed Chapultepec Park.

“What is not clear is whether they have enough money to compete with Televisa,” Trejo Delarbre said. “Experience is not enough. This is going to take financial resources.”

Nor is that the only point that remains unclear.

“The government still has not announced the basis for the sale: the conditions or even what exactly they are selling,” said Lorenzo Astivia, commercial director of Radio Programas de Mexico, a radio network that owns an all-news station and the city’s English-language station.

In addition, there is the possibility that the government will simply hand over the Red 7 network to a new owner without further announcements, much less an auction, Trejo Delarbre said.

“The Communication and Transportation Ministry has shown a strong preference for Televisa,” he said. “A few days ago, they just gave them two concessions to develop high-definition television without even taking other bids.”

However, the Finance Ministry, in the sale of other state-owned companies, has shown a strong preference for getting the highest price in competitive bidding. A high-ranking Finance Ministry source said the ministry had not been notified formally of its role in the divestiture, which was announced by the Interior Ministry.

Even if the government does not sell the network directly to Televisa, Trejo Delarbre said, the corporation may eventually gain control of it anyway. Competitors have tried unsuccessfully to launch independent stations--most recently in Guadalajara, the country’s third-largest city--and they have all ended up either going out of business or selling to Televisa, he said.