Window Opens for Foreign Investment in Televisa

The Aleman family, one of the major players in Spanish-language television for the last 30 years, disclosed Tuesday that it is getting out of the business, opening the door to a possible foreign investment in Televisa, Latin America’s dominant television network.

The departure of the Alemans further consolidates the control of Televisa in the hands of 31-year-old Chief Executive Emilio Azcarraga Jean and his cousin, Alejandro Burillo, who have transformed and streamlined the once-dowdy network over the last two years.

Azcarraga took over the Televisa reins when his father, founder Emilio Azcarraga Milmo, died in April 1997. He said Grupo Televicentro, the privately held company that controls Televisa, will either buy back the Alemans’ 14.4% share or sell it to “a third [party] or third parties.”

Azcarraga, his family and Burillo together own 86% of Televicentro, which in turn has a 26.5% controlling share in Televisa.

“There’s definitely a window” for a foreign investor to step in and buy the shares, said Leonardo Simpser, Mexican media analyst for Deutsche Morgan Grenfell.

He said a strategic partner, such as a foreign media company, “would be the best option. It would increase the probability of Televisa becoming more professional more quickly and, depending on who the strategic partner is, you could see important synergies.”

Mexican media speculated that a partner such as Time Warner Inc. or Rupert Murdoch’s News Corp. could bid for the Aleman holding. Azcarraga said, however, that he had not entered into talks with any potential investor and wasn’t even certain Televicentro would sell the shares it was acquiring from the Alemans.

News reports estimated the value of the Aleman holding at $150 million to $200 million, although Simpser said, “I think that’s ridiculously low.” Televisa’s market capitalization is $5.1 billion.

Like the Azcarraga family, the Alemans grew wealthy through their Televisa investments. Family elder Miguel Aleman Velasco left his network executive position last year and won election as governor of Veracruz state for the ruling Institutional Revolutionary Party, or PRI.

The news conference called to announce the family’s plans appeared designed to counter speculation about a split within the Televisa leadership. Azcarraga and Miguel Aleman Magnani embraced for the cameras and emphasized that they remain friends.

Aleman said the sale of the family’s holdings had “absolutely nothing to do” with speculation that the network wanted to distance itself from his father’s expected run for the PRI presidential nomination in the 2000 race.

The change leaves Azcarraga and Burillo in undisputed control as they extend Televisa’s vast reach throughout Spanish-speaking Latin America. The company already has the world’s most extensive programming output as well as a vast distribution network over the air, cable and satellite, including access to the U.S. Latino market through the U.S. Spanish-language Univision network, which it supplies with programming.