Hoping to unravel the creation of a Spanish-language media giant, a small, New York-based Hispanic advocacy group is arguing that the newly enlarged company violates federal laws on media concentration.
In a lawsuit filed Wednesday, the National Hispanic Policy Institute alleged that Univision Communications’ $3.5 billion acquisition of Hispanic Broadcasting Corp. would “diminish the diversity of sources available to Spanish-language speakers.”
The institute, headed by New York state Sen. Efrain Gonzalez, filed the petition with the U.S. Court of Appeals for the District of Columbia Circuit.
Univision’s purchase of HBC was approved last month by the three Republican members of the Federal Communications Commission over objections by the agency’s two Democrats.
The combination creates a Spanish-language powerhouse that fuses HBC’s 60 mostly Spanish-language radio stations with Univision’s two broadcast TV networks, Univision and Telefutura, the Galavision cable TV network, 52 local television stations and an assortment of record labels.
Most of the new company’s holdings are concentrated in the most populous markets, home to the nation’s roughly 35 million Latinos. Univision.com is also one of the most popular Spanish language portals.
Univision, which is based in Los Angeles, is 11 percent owned by Mexican media titan Televisa. Clear Channel Communications, which owns about 9 percent of the country’s radio stations, holds a 6.25 percent stake.
The new Univision’s closest Spanish-language competitor is Telemundo, a unit of NBC, which is owned by General Electric Co.
A court challenge had been expected ever since the FCC’s two Democratic commissioners charged that Chairman Michael Powell had erred in not categorizing Spanish-language radio and television as a market separate from English-language media.
The lawsuit takes up the argument of Democratic commissioners Jonathan Adelstein and Michael Copps, who said Spanish-language media should be judged as a separate entity, which Univision would excessively dominate.
“By agreeing to this merger, the FCC has created a monopoly in Spanish-language media,” said Gonzalez, who started the National Hispanic Policy Institute about six years ago. “Spanish media is distinct. Everyone knows it serves a very different market than English speakers.”
Gonzalez said that just as advertisers separate Spanish language media from English, the FCC should have determined that Spanish-language television and radio stations serve a distinct audience.
The suit also argues that Univision’s 31 percent stake in Entravision Communications, a television and radio company based in Santa Monica, Calif., violates FCC rules on media concentration. The institute alleges that Univision’s investment in Entravision gives it control of more radio stations in certain markets than is permitted by the FCC. In Los Angeles, for instance, Univision has interests in 10 radio stations, two more than federal law allows, an institute attorney said.
A FCC spokesman said the agency does not comment on ongoing litigation.
Univision spokeswoman Stephanie Pillersdorf described the company as a “passive investor” in Entravision. To win Justice Department approval for the merger, Univision agreed to lower its 31 percent ownership stake in Entravision to less than 10 percent by 2009.
In a statement, Pillersdorf said the National Hispanic Policy Institute had been given sufficient opportunities to oppose the merger during the FCC’s proceedings.
Spanish Broadcasting System, a Coconut Grove, Fla., company that has filed a lawsuit to block Univision’s acquisition of HBC, said it was not involved in the new suit.
