Record amount of fines totals $24 million
With approval of its pending sale to an investor group led by Haim Saban for $12.3 billion hanging in the balance, Univision apparently found itself between a rock and a hard place.
While other networks have balked at the Federal Communications Commission fines of far less severity, Univision recently agreed to pay a record $24 million to settle complaints over its children’s programming.
The decision, however costly, may be the cost of doing business these days amid regulatory pressures and scrutiny by watchdog groups.
Transfer of Univision’s broadcast license has to be approved by the FCC, which can block a transfer when outstanding issues are involved. In Univision’s case, the outstanding issues are complaints by the United Church of Christ, a Cleveland, Ohio-based coalition of churches that has been carrying out a larger strategy against media consolidation, which the planned acquisition of the Spanish-language broadcaster represents.
The UCC and the National Hispanic Media Coalition filed complaints in 2004 and 2005 with the FCC involving 24 Univision stations, claiming they were not meeting requirements to broadcast at least three hours of educational children’s programming per week.
Univision argued that it was indeed meeting those requirements, chiefly through shows such as “Complices al Rascate,” a telenovela for teens. But the UCC cited experts who claimed the storylines in the shows were adult-themed and not educational.
Univision decided to stop arguing when approval of the acquisition by Saban’s group suddenly hung in the balance.
“It is standard operating procedure to get all issues resolved before an acquisition,” said media analyst and former FCC official Blair Levin. “There’s never been a case when parties didn’t reach an agreement.”
Indeed, before the major broadcast networks recently took the FCC to court for allegedly unjust indecency findings, the standard procedure was to ignore indecency fines until a net had other business to transact, such as buying more stations. Settling outstanding fines was considered part of the cost of the new deal.
The UCC is a steadfast opponent of loosening media ownership rules, claiming that doing so decreases diversity in programming and voices, and it urges members to send that message to federal regulators.
“It is essential that those of us who are concerned about the public interest in media contact the FCC with our concern that media consolidation is not in the best interest of democracy in this country,” the UCC says on its Web site. It then provides instructions on how to file an online complaint with the FCC, complete with five paragraphs of suggested text addressed to FCC chairman Kevin J. Martin.
“The question of who owns the media is a question of social responsibility,” the text reads. “For example, children are often served poorly by the current media system. UCC has recently been instrumental in ensuring that a minimum of protection will be accorded to children who watch broadcast television. But more protection is needed. And studies show that a more consolidated media market serves children less well than a more diverse market.”
Martin reportedly has approved a consent degree under which Univision will pay the $24 million fine, paving the way for approval of the net’s sale to a consortium of private equity firms. One of those firms is Providence Equity Partners, in which former FCC chairman Michael Powell is a senior executive.