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Univision Gets Approval for Radio Merger

The FCC splits along party lines in a vote to allow the $3.25-billion deal with Hispanic Broadcasting.

September 23, 2003|Meg James | Times Staff Writer

In the face of a growing political divide over media ownership, the Federal Communications Commission on Monday voted 3 to 2 along partisan lines to allow Univision Communications Inc.'s $3.25-billion acquisition of radio chain Hispanic Broadcasting Corp.

Although approval of the deal had been expected for months, the decision highlighted the increasing rancor over an issue that has roiled Congress, the courts and the commission itself.

"It's now open season for media concentration," wrote Commissioner Jonathan S. Adelstein, one of two Democrats on the panel to vote against Univision's purchase of the nation's largest Spanish-language radio operation. Hispanic Broadcasting owns more than 55 stations, including four in Los Angeles.

Adelstein and fellow Democratic Commissioner Michael J. Copps said the FCC was failing in its mission to ensure a variety of sources of news and entertainment for the nation's 38 million Latinos, more than half of whom speak mostly Spanish.

"Today's decree from the FCC is: Let them eat English," Adelstein wrote in his dissent, arguing that Latinos seeking voices other than Univision's would be pushed toward English-language media.

Univision, controlled by Los Angeles billionaire A. Jerrold Perenchio, will now command an estimated two-thirds of the nearly $2.8 billion spent this year on advertising on Spanish-language television and radio.

Federal regulators grappled for months over the question of whether Spanish-language media constituted a distinct market or simply a sliver of the overall U.S. media market. Monday's decision ratified an earlier ruling by the Justice Department that Univision would not be a monopoly because Spanish-language media are part of the general media market.

"The implications of treating Hispanics as an insular group removed from the general mainstream of news, entertainment, and information are troubling," wrote the three Republicans on the panel: Commission Chairman Michael K. Powell and Commissioners Kathleen Q. Abernathy and Kevin J. Martin.

But the commission's Democrats argued that the merger gave a dominant company excessive power inside a discrete market. "Today's order allows one of the Big Media conglomerates, Univision, to assume something close to monopoly power in the fast-growing Spanish-language media," Copps wrote.

The Univision merger was considered under rules in existence before the June vote to relax ownership regulations. However, the FCC told Univision it might have to sell two radio stations, in Albuquerque and Houston, to comply with the newer rules, which have been stayed pending judicial review.

The Dallas-based radio chain, renamed Univision Radio, will round out Univision's portfolio of properties that includes three television networks -- Univision, TeleFutura and cable channel Galavision -- 53 television stations, an Internet business and a music division that boasts three record labels.

Univision now will control a slate of radio stations as well as the nation's biggest Latin music record labels. Competitors fear that Univision's radio stations will become little more than a marketing machine to boost the sales of its recording artists.

"The quickest way to mess up a radio company is to play music that people don't want to listen to," said Mac Tichenor Jr., former chief executive of Hispanic Broadcasting, who Monday became president of Univision Radio. "Our marching orders are to play the best music we can to get the best ratings we can."

Univision shares closed at $34.93, down 3 cents, on the New York Stock Exchange.

Times staff writer Jeff Leeds contributed to this report.

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