The Federal Communications Commission has approved a measure that relaxes foreign ownership rules to enable Grupo Televisa of Mexico to claim a larger stake of the U.S. Spanish-language broadcasting giant Univision Communications.
The move comes just days before President-elect Donald Trump takes office.
Univision's chairman, Haim Saban, has been lobbying the FCC for the waiver for more than three years. The measure, which was approved by the FCC's Media Bureau late Tuesday, will enable Univision's private equity owners to sell some of their shares in Univision to Televisa.
"We find that the public interest would not be served by refusing to grant Univision's petition for a declaratory ruling to permit foreign ownership of Univision Holdings," William T. Lake, chief of the FCC's Media Bureau, wrote in Tuesday's 11-page order.
The order noted that allowing Televisa to increase its stake in Univision would not jeopardize national security concerns. The move might also allow an increased financial investment in the Spanish-language media company.
Several of the private equity firms have been eager to unload their stakes in Univision, which is struggling with plummeting prime-time ratings and lower revenue.
The FCC waiver — which applies only to Univision and Televisa — is expected to pave the way for Univision's long-planned public offering to provide its private equity owners with an exit.
Current U.S. law prevents foreign companies from owning more than 25% of a U.S.-based media company that owns radio or TV stations. The rule is part of the U.S. Communications Act of 1934, passed when lawmakers were worried that a foreign power could gain control of a radio station and begin broadcasting harmful propaganda to U.S. residents.
Televisa — Mexico's largest entertainment company — has long wanted to increase its stake in Univision. Televisa provides about a third of Univision's programming, including the over-the-top telenovelas produced in Mexico City, and it currently holds a 10% equity interest in Univision.
But Televisa's ambitions in the U.S. have been limited for decades by the foreign ownership rules.
Televisa is based in Mexico City and its controlling shareholder, Emilio Azcarraga Jean, is a Mexican citizen. Azcarraga Jean's grandfather co-founded Univision 55 years ago, and Televisa has long had strong ties with Univision.
Under the waiver, Televisa would be allowed to own a 40% stake in Univision, which would give the Mexican company operational control. The FCC also said that other foreign interests could hold an additional 9% of New York-based Univision — but U.S. citizens must maintain a 51% stake in the media company.
The granting of the waiver comes in the waning days of FCC Chairman Tom Wheeler's tenure. Wheeler supported relaxing the rules, and some wondered whether the next FCC chairman, who will be appointed by Trump, would be as amenable to allowing a Mexican company such a big stake in a major U.S. media firm.
Trump made derogatory comments about Mexicans and campaigned on a promise of building a wall along the Southern border to prevent immigrants from entering the U.S. without permission.
Trump also sued Univision in 2015 over a flap surrounding Univision's termination of its participation with the Miss Universe contest, which Trump then owned. The lawsuit was later settled.
In addition, Saban — Univision's billionaire chairman — was one of Hillary Clinton's biggest financial backers in her presidential campaign against Trump.
"Univision is a lot better off getting this waiver done now, rather than a month from now," Harold Feld, senior vice president of Public Knowledge, said in an interview Wednesday.
The incoming FCC could vote to overturn the rule change, Feld said, but he noted that foreign ownership rules have been relaxed before to allow a German and then a Japanese company to operate cellphone companies T-Mobile and Sprint, respectively, in the U.S.
The U.S. foreign ownership rule also is one of the reasons Sony Pictures Entertainment, owned by the Japanese electronics giant, does not own TV stations. Sony Pictures is the only major Hollywood studio without an interest in a TV station group.