Lawsuit settled out of court
A lawsuit brought by Mexico’s media conglom Televisa against Univision, the most-watched Spanish language web in the U.S., was settled out of court Thursday.
The announcement came just before Televisa chairman-CEO Emilio Azcarraga Jean was due to take the stand in Los Angeles Federal Court.
Televisa had charged Univision with material breach of contract, claiming $134 million in unpaid royalties, in an effort to end its 25-year programming pact. The accord supplies Univision with the telenovelas and sports programming that ensure its dominance among Spanish-speaking auds.
Settlement details were hashed out between Televisa exec VP Alfonso De Angoitia and Univision chairman Haim Saban, who had been in court every day, in talks that began at noon Tuesday.
The contentious programming license agreement will continue until its skedded 2017 expiry. However, it has been amended to give Televisa an annual $65 million worth of advertising time on Univision, totaling $585 million, in the remaining years.
Televisa also will collect royalties from programs that were at issue during the litigation such as specials and vignettes.
Univision will pay Televisa $25 million for unpaid royalties. As Univision has already paid $21.5 million, under protest, only $3.5 million is due.
Univision prexy and chief operating officer Ray Rodriguez and Azcarraga were in the courthouse patting each other on the back. They refused to comment on the case but looked visibly relieved.
“Univision is receiving oxygen in the form of the continuing programming license agreement,” said lead Televisa lawyer Marshall Grossman of Bingham McCutchen.
“This is a good first step. Now they can go back to the business of business,” said Univision lawyer John Keker of Keker & Van Nest.
Under a separate agreement, Televisa will license to Univision TV rights to the home games for Televisa-owned soccer teams America, Necaxa and San Luis for 2009.
A Univision spokesman later called the out-of-court settlement “a mutually beneficial agreement. The cash and EBITDA impact to Univision from the settlement is minimal.”
The court case, which began Jan. 6, has been brewing since May 2005.
Still pending is the resolution of a separate dispute between the two parties on U.S. Internet rights to Televisa programming. Unless resolved earlier, this case will be adjudicated in a federal district court in Los Angeles starting March 3.
The companies issued the following statement: “We are pleased that today’s settlement concludes this time-consuming litigation. This settlement serves the best business interests of both Televisa and Univision. It assures the public that Univision will continue to have access to consistently top-quality Hispanic programming. It enables Televisa to continue utilizing Univision’s extensive television networks as an important distribution channel for its content into the U.S. marketplace.
“For Univision, it assures that there will be no disruption in some of its most popular and valuable programming, as well as affording Univision an ongoing pipeline of future content developed by Televisa.”