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Sunday, Jul 5, 2009
If the FCC allows the two biggest Spanish-language media companies in the U.S. to merge, it'll create a media conglomerate that will dwarf all competitors -- and could help GOP-friendly radio titan Clear Channel deliver Hispanic votes for Bush in '04.
Apr 24, 2003 | How do you say Clear Channel in Spanish?
Pending FCC approval, a new consolidated media, music, and radio powerhouse may soon be born. The $2.4 billion deal between the Hispanic Broadcasting Corporation, the leader in Spanish-language radio stations in the U.S., and Univision Communications -- already the market leader in Spanish-language TV, cable and music -- would create a new company that controls nearly 70 percent of Spanish-language advertising revenue in the United States.
The deal is big and contentious, and involves politics, music and media -- and, to make matters even more interesting, Clear Channel, the U.S. radio station conglomerate, has a starring role. Clear Channel is HBC's largest shareholder, and the company has been accused by opponents of the deal of maneuvering illegally behind the scenes to exert control over HBC, as well as spreading rumors of drug use about the CEO of HBC's chief competitor.
Clear Channel and Univision boast many similarities. Neither is known for the originality of its programming. Both are run by conservative, politically active billionaire Republicans, and both exert tremendous, near-monopoly power in their markets. In fact, if the merger goes through, Univision's power in the Spanish-speaking world would dwarf what Clear Channel has achieved in the radio and concert business over the past five years.
It's a transaction brimming with widespread political, cultural and economic ramifications. The Spanish-language mega-merger comes at a time when the Republican Party is trying to reach out to the burgeoning Hispanic voter community in the United States. President Bush even gave Univision his first national television interview following his inauguration. More recently, congressional Democrats have grumbled over Univision's fawning coverage of Miguel Estrada, the conservative -- and controversial -- judge recently nominated by Bush to serve on the U.S. Court of Appeals. (At the same time GOP-friendly Clear Channel has swung open its stations to all sorts of Republican causes, to the point where one Democratic member of Congress recently accused Clear Channel of blatantly skewing its war coverage to favor the administration.)
Culturally, the deal is important because Univision, which utterly dominates television programming for Hispanics in America, will soon enjoy extraordinary pull in Latin music, able to use its label, radio stations and TV outlets to create hits. "It's just ripe for abuse in terms of Univision deciding which artists appear on TV shows, and on the radio programs," says Felix Gutierrez, a visiting professor of journalism at the University of Southern California.
The Univision/HBC announcement set off the usual media consolidation alarms about the lack of diversity among media owners. "That's too much power in one person's hands," warns Estor Renteria, president of Hispanic Americans for Fairness in Media. Hispanics account for nearly 14 percent of the U.S. population and are the nation's largest minority group.
"A monopoly wasn't good for Standard Oil or AT&T, so why is it good for Spanish language broadcasting?" adds Efrain Gonzalez, a New York state senator and chairman of the National Hispanic Policy Institute.
Univision insists that even with HBC under its umbrella the company would not be a monopoly, but only a relatively small player in the larger English language media universe. Executives point out that its mighty television unit, which during the 2000-2001 season accounted for every top 20-rated Spanish-language program in America, still only attracts 5 percent of American television viewers between the ages of 18 to 49. Worse, they say, it only lands 2 percent of the advertising dollars. So how can it be a monopoly?
But opponents of the merger, such as Rep. Robert Menendez, D-N.J., argue that Spanish-language media should be considered its own separate market. He wrote to the FCC in March urging that it "establish a clear definition of the separation between Spanish-language and English-language media markets." But FCC watchers are skeptical that the commission will do so, leaving a loophole wide open enough for Univision to "drive a truck through," says Gutierrez, who has studied Latin media for 30 years.
The merger is raising, all over again, the same red flags that have gone up since Clear Channel began its unprecedented land grab following the Telecommunications Act of 1996. The company went from 40 stations then to approximately 1,200 stations today, or roughly 970 more than its closest competitor. Clear Channel also takes advantage of its 37 television stations, 770,000 billboards and unmatched list of venues, promoters and tours to exert control over the concert industry. Last year the company sold 30 million concert tickets, or 26 million more than its closest competitor.
Clear Channel today is a sprawling media player and has attracted intense political and consumer scrutiny for wielding too much power. But for its influence to compare with the astounding role a post-merger Univision would play in the Spanish-language radio, TV and music markets, Clear Channel would have to first go buy EMI Records and then NBC as well.
