Chilevision over, Pinera struggles to offload asset

Mexico City– The Aug. 25 sale of Chile’s No. 3 terrestrial web Chilevision to Time Warner, after months of trying sell the network to a number of suitors to make good on his campaign promise, has allowed Chilean President Sebastian Pinera, the network’s owner, to finally brush aside the angry rhetoric of his political opponents.

Things were darkest for the billionaire and former media-mogul just last week when a report by Chile’s federal comptroller, known as Controleria, showed that they have yet to determine how to resolve the licensing issue that crippled a $130 million to $140 million deal with Linzor Capital in June.

The conflict revolves around the rights for the Chilevision signal, which belongs to the U. of Chile, and is scheduled for renewal in 2018 as part of what had been a 25-year lease.

The report said the original agreement does not allow for automatic renewal. As a result, Time Warner could face a potential license renewal battle in eight years.

Pinera bought the company in 2005 for $24 million, and with the sale price reported at $155 million, it means he more than sextupled the value of the network in five years.

In political terms, Pinera is finally making good on his much-touted and more recently decried campaign promise to sell off Chilevision immediately after entering office in March.

When the deal with Linzor Capital fell apart, there were rumblings that the administration would never rid itself of ties to the web.

Since the report came out early last week, there had been increasing pressure and resentment growing against Pinera on the Chilevision sale. Guillermo Ceroni, of the opposition PPD party, called the process “a never-ending pit” and blamed the president for not having taken action before being sworn in as the country’s leader.

Closing a deal on the web should help silence critics who compare Pinera to Italy’s Silvio Berlusconi.

Government spokeswoman Ena von Baer was quick to respond to the report, telling reporters the next day that the sale is in fact in the final stage of approval.

“We hope the sale will be finished in the next few weeks,” said von Baer.

She later added, “All Chileans know that the president was at the point of selling the channel, but unfortunately the sale failed for reasons not directly related to him.”

Pinera guiding Chilevision to a net profit of $15 million last year.

Televisa’s last incursion into Chilean TV came via its partial ownership in the 1990s of Megavision (now Mega), the nation’s largest broadcaster.

The sale is being managed by investment bank Larrain Vial.

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