Battle Intensifies Over Control of Mexican TV

When Mexican voters elected Vicente Fox to the presidency in 2000, ending 71 years of one-party rule, many hailed it as a watershed. Now lawmakers seek to dislodge what they see as another roadblock to democratic progress: Mexico’s television duopoly.

Two companies, Grupo Televisa and TV Azteca, control 95% of Mexico’s television stations, snare most of its advertising dollars and determine how millions of Mexicans are entertained and informed. In a nation where the vast majority of people get their news from network television, the companies have extraordinary power to shape public opinion.

Too much power, some have concluded. As Mexico prepares for presidential elections next year, an unlikely tri-partisan coalition of legislators wants to loosen the grip of Mexico’s TV barons and foster more competition. They propose limiting broadcast ownership, opening up the secretive licensing process and regulating political advertising during elections.

Citizens groups are demanding more transparency, viewers want more choice and businesses welcome the prospect of lower advertising rates. Although some are doubtful any major change will make it through Mexico’s gridlocked Congress this year, many lawmakers agree that the nation’s 45-year-old broadcasting law needs updating, even if they differ on how to go about it.

“This isn’t about political parties,” said Sen. Manuel Bartlett Diaz, a member of the former ruling Institutional Revolutionary Party (PRI) who is helping spearhead the broadcast overhaul. “This is about confronting a monopoly.”

That was an extraordinary comment from a politician whose party has long benefited from the lack of diversity.

Mexico’s media played an integral role in helping to prop up “the perfect dictatorship,” as Peruvian writer Mario Vargas Llosa called the PRI-controlled political system.

Government officials paid print reporters for flattering coverage and advertised heavily in their publications. Perhaps more important, lucrative broadcast concessions were awarded to pro-government entrepreneurs.

The most notable was Emilio Azcarraga Milmo, the now-deceased head of Televisa, who merged several Mexican broadcast groups into a single, dominant player in 1973.

Today, Televisa is the world’s largest Spanish-language media company, with revenue of $2.1 billion in 2003, more than 12,000 employees and holdings in radio, publishing, sports, entertainment, cable television and satellite TV. Net income was $320 million in 2003, up 351% from 2002.

The company is a major producer of soap operas and other programming distributed around the world. Televisa is part owner of and a major content provider for Los Angeles-based Univision Communications Inc. and has expressed a strong interest in expanding its U.S. presence.

But its bread and butter remains Mexican network television, which accounts for nearly two-thirds of its revenue. For that, publicly traded Televisa can thank Azcarraga’s cozy relationship with the former ruling party. In exchange for a virtual monopoly on TV broadcasting, Televisa for decades functioned as de facto government mouthpiece while alternately ignoring or hectoring the opposition.

Larry Lorenz, an expert on Mexican media, recalled one of the rare interviews Televisa conducted with National Action Party (PAN) candidate Miguel Clothier during the hotly contested 1988 presidential race. In contrast to the reverential treatment given to PRI candidate Carlos Salinas de Gortari, who ultimately won the election, Televisa’s questioning of Clothier was openly hostile.

“They were laughing on the set at him as if he were some sort of fool,” said Lorenz, a communications professor at Loyola University in New Orleans. “It was shameless treatment.”

Azcarraga -- who once publicly declared himself “a soldier of the president and at the service of the PRI” -- reportedly pledged more than $50 million at a party fundraiser hosted by Salinas to show his gratitude for Televisa’s privileged status.

But it was Salinas who gave Televisa its first real taste of competition in Mexico. In 1993, in keeping with the then-president’s philosophy of privatizing state industries, some government stations were sold to a private-sector group headed by retailing tycoon Ricardo Salinas Pliego.

Although his TV Azteca network is a distant second to Televisa in Mexico, the publicly traded company has grown quickly, posting $648 million in revenue and net income of $140 million in 2003.

TV Azteca holds interests in a soccer team, an Internet portal, Mexican mobile operator Unefon and the Azteca America television network, whose stations include KAZA-TV 54 in Los Angeles. (The U.S. Securities and Exchange Commission this month filed fraud charges against TV Azteca, alleging that it hid a debt transaction with Unefon that netted Salinas $109 million in profit.)

Media observers said Mexico’s changing political climate, coupled with the rise of TV Azteca and increasingly feisty print and radio journalists, has compelled Televisa to become more balanced. Emilio Azcarraga Jean, who took over the family media empire after his father died in 1997, is widely credited for injecting a new level of professionalism and fairness into the news operation.

Still, the fact remains that two companies control much of the information flowing to more than 100 million Mexicans.

Although the nation boasts hundreds of newspapers, including at least 18 dailies in the capital alone, few are widely read. Radio isn’t the powerhouse it is in the United States, in part because fewer than 2 in 10 Mexicans own cars. Only an estimated 9% of households have Internet access.

But more than 85% have a TV set. In a country where the minimum wage is less than $5 a day, few families can afford satellite or cable, so most of those sets are tuned to Televisa or TV Azteca’s free channels.

Juana Cruz shrugged when asked if she was enjoying the prime-time soap opera that was airing on an set tuned to Televisa’s Channel 2 in the Mexico City restaurant where she was dining on a recent evening. “I guess so,” she said. “There is not much else” to watch.

Other Latin American countries have network television oligopolies, but nothing on par with Mexico, said Sallie Hughes, an assistant professor of journalism at the University of Miami.

In an article to be published next month in the journal Political Communication, she and co-author Chappell Lawson, an assistant professor of political science at the Massachusetts Institute of Technology, cite figures showing that Televisa and TV Azteca together controlled nearly 97% of Mexico’s broadcast viewing audience in 2002.

“I can’t think of any democratic country anywhere that has a more concentrated private-sector TV broadcast system,” said Hughes, who is working on a book about Mexico’s media.

Some Mexicans have had enough. Academics and civic leaders have joined legislators from Mexico’s three major parties in demanding changes to the nation’s broadcasting laws. Mexican radio, too, is highly concentrated, and backers of the proposed legislation hope to pry it open, but cracking Mexico’s insular television market remains their prime objective.

The most sweeping changes would limit the concentration of broadcast ownership so that no single company would control more than 35% of any geographic market. The proposed changes also call for the creation of an independent agency, similar to the U.S. Federal Communications Commission, to oversee the approval of broadcast licenses and open the process to public scrutiny.

At present, the executive branch has nearly total control over the granting of concessions, a process historically cloaked in secrecy, said Raul Trejo Delarbre, media expert at the National Autonomous University of Mexico.

“Can you imagine not being able to find out even basic information, such as who owns a concession or when it expires?” Trejo said. “This is what we have been living with in Mexico.”

The proposed law would also set a floor on the amount of Mexican-produced content some stations would have to air daily in a bid to support homegrown talent and production. And it would put the independent Federal Election Institute in charge of buying and allocating paid political spots during election season, with the goal of ensuring equitable pricing and airtime for all candidates.

Some legislators don’t like the idea of adding yet another agency to the federal government’s sprawling bureaucracy. Others think the content and political advertising rules smack of censorship. Still others see all the high-minded talk about democracy and diversity as a smokescreen for rival media moguls who want a piece of the action.

Noticeably absent from the public debate have been Televisa and TV Azteca. The companies, which declined repeated requests for interviews, have said virtually nothing in public about the proposed rule changes.

Televisa Chairman Azcarraga Jean made one recent comment: “I really believe that there are problems in this country, such as the budget, that are much more important than the issue of the legislation of radio and television.”

Behind the scenes, the companies have been working feverishly to persuade lawmakers to kill the overhaul, according to Javier Corral Jurado, a PAN senator who helped craft the legislation.

Corral says he and other supporters of the overhaul have been denied coverage by Televisa and TV Azteca’s national channels as a warning to other lawmakers about television’s power to make or break a political career in Mexico. He said some of his colleagues were fearful of potential repercussions.

“There have been threats, blackmail, pressure,” Corral said. “But this process is in motion. There is no going back.”

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Controlling TV

Two companies own nearly all of Mexico’s 461 commercial television stations.

Televisa: 56%

TV Azteca: 39%

Independent and government: 5%

Source: Raul Trejo Delarbre, National Autonomous University of Mexico