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Fierce Battle in Argentina: Grupo Clarin vs. President Cristina Fernandez de Kirchner

2009 media law that limits cable ownership to a 35% national market share in not more than one-quarter of Argentina’s provinces

It’s big media vs. big government, a scenario being played out all over Latin America. But in Argentina, the battle is especially fierce, pitting the country’s media giant, Grupo Clarin, against President Cristina Fernandez de Kirchner, who has already nationalized the country’s pension funds, its main airline and its biggest oil company.

At issue is a 2009 media law that limits cable ownership to a 35% national market share in not more than one-quarter of Argentina’s provinces.

That hit Clarin in the bottom line.

The media giant controls between 40%-60% of the country’s cable market — depending on whose stats, the government’s or Clairn’s, you believe — 28% of the Internet market, Argentina’s most-watched broadcast network, Artear-Canal 13, three provincial channels, radio stations and the country’s biggest newspaper. Some 80% of Argentine homes have cable, and Clarin’s cable operations contributed to 89% of the company’s revenues in 2012. This year, Clarin posted $254.3 million in first-half operating profi ts from $1.15 billion in sales.

Clarin has fought the law through multiple appeals and counterappeals over the past four years. The supreme court, which heard arguments for the case Aug. 28-29, is expected to make a ruling sometime between October and the end of the year.

Clarin is a key player for Hollywood and U.S. investors. Goldman Sachs holds an 18% equity stake in the company, while its cable operator, CableVision, carries many U.S. channels, including ESPN, Fox Sports, the Disney Channel, HBO, TNT, Warner Channel, Sony, Fox Intl. Channel, E! Entertainment TV, Discovery Channel and History. The media giant is also a partner with Disney in Patagonik Film Group, Argentina’s biggest movie producer.

Some say the law was passed by the Kirschner-controlled house as a political payback after Clarin had a falling out with the administration in 2008, when Clarin’s news coverage sympathized with farmers’ protests over a tax increase. Since then, the government has passed legislation that bans supermarket advertising from newspapers, while Clarin has backed anti-government rallies and used its news outlets to continually allege government corruption. The government has seen its support dwindle in recent months, on the heels of rampant inflation.

Critics of the government call the media law a way to silence a free and independent press. Pro-government forces see it as a way to break a monopoly. At stake is the immediate future of Argentina’s media landscape.

The supreme court’s final judgement is not at all clear, given the political forces at work. La Nacion, an independent newspaper, cited sources close to supreme court president Ricardo Lorenzetti that said succinctly, “The case is highly complex.”

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