CNI-Canal 40 is off air with no cash
MEXICO CITY — TV Azteca is struggling with fraud charges against its topper, Ricardo Salinas, but it isn’t the only Mexican net suffering under a problematic owner
Indie net CNI-Canal 40, which runs a distant third behind Televisa and TV Azteca but is acclaimed for its news coverage, was forced off air May 19 when 300 staffers went on strike, demanding 40 million pesos ($3.6 million) in back pay. Since it has no cash, no return to broadcast is in sight.
Making matters worse, if the net stays off air for 60 days, Mexico’s Communications Secretary must consider revoking its broadcast concession by law — and the web will go bankrupt.
It’s a mess made worse by the fact that the net’s owner, Javier Moreno Valle, has been AWOL since February when Mexico’s Tax and Finance Secretary announced that Canal 40 owed $19 million in unpaid taxes.
Moreno Valle has a reputation for questionable business tactics, and has been accused of money laundering and plying public officials for favorable treatment.
The current crisis is not the first at Canal 40. One of its biggest creditors is TV Azteca, which loaned it $15 million as part of a 1998 shared production and advertising deal that quickly went sour and reached a nadir in December 2003.
The deal gave Azteca the right to buy 51% of Canal 40 should the contract be broken, and when the indie net stopped sending revenue-sharing checks, Azteca topper Salinas, himself a maverick businessman, sent armed thugs to take over net’s transmission towers.
That dispute was ironed out, but Canal 40’s debt to Azteca, plus $20 million in debts to banks and other creditors, are still outstanding.
Since then, Azteca has blocked Moreno Valle’s attempts to sell the net. Azteca has turned down offers of $60 million to renounce its contractual right to buy (the net has been valued at between $75 million and $100 million, including debt).
Canal 40 says Azteca has gone out of its way to make life difficult for the net, with the ultimate goal of buying it and expanding its channels to three from the current two it controls.
“We can’t sell ads because (Azteca) has gone to the advertisers to offer better conditions or to threaten them,” says Canal 40’s attorney Javier Quijano (who is himself owed millions of pesos by the net).
Ironically, the net’s creditors may be forced to bail it out, since a continuing strike will lead to bankruptcy and a total loss for everyone.