Rivals Prisa and Cisneros pull out of license auction
And then there was one.
The deadline for companies to bid for a license to operate Colombia’s third national commercial TV web expired June 23 at 4 p.m., with two of the three contenders pulling out after years of haggling.
It’s now more than likely that Spanish media giant Grupo Planeta will become the channel operator by default, finally breaking the 12-year duopoly of RCN and Caracol TV.
Just a few days earlier, Spanish media conglom Grupo Prisa and Venezuelan media giant Grupo Cisneros pulled out of the bidding, citing a lack of transparency in the auction.
“None of our concerns had been addressed,” says Ricardo Alarcon, president of Prisa-owned Radio Caracol, a view shared by Cisneros spokesperson Antonieta Lopez.
Prisa’s key concern is a Spanish audiovisual law that limits a Spanish company’s foreign media ownership to 25%. However, it is unclear whether Spain can waive that ruling and allow as much as a 40% participation because it enjoys a favored-nation status with Colombia and, therefore, its companies.
A major issue for both Prisa and Cisneros is the fact that the third channel will transmit nationwide on a weaker UHF bandwidth, while RCN and Caracol TV air on the stronger VHF.
“We would not be operating on a level playing field,” says Fernando Devis, general manager of Prisa’s Colombian outpost, Pacsa.
Getting to the point of sale has been a long process. The auction began in 2008 with six contenders, including NBC-U’s Telemundo and Venezuela’s 24-hours news web Globovision, vying for a stake in the robust Colombian ad market, valued at nearly $500 million a year, with a TV aud of at least 20 million.
National TV regulator CNTV pushed back the bidding deadline twice in December, once in January and as recently as June 8 to accommodate Prisa and Cisneros’ concerns, but to no avail.
That leaves the field open for Planeta Colombia, whose prexy, Francisco Sole, has declared that the company will comply with state rules requiring it to add an extra 10% to its initial offer of $54.6 million if no other bidders come forward. Atty. Gen. Maria Eugenia Carreno declared last week that she would allow a single bidder.
However, Planeta’s success has its problems.
The landslide victory of president-elect Juan Manuel Santos in the June 20 runoff election raises conflicts of interest. Grupo Planeta is the majority stockholder of media giant El Tiempo, which is owned by the Santos family.
“No legal impediment exists for Planeta to run the third channel, but it does raise some moral issues,” says Devis.
CNTV intends to award the new license on July 27. If all goes well, the web will debut in January.