Univision, Televisa settle lawsuit

U.S. Spanish-language network Univision and Mexican media conglomerate Televisa reached a settlement in a lawsuit over royalties.

According to the $600 million agreement between the two firms, Univision will pay Televisa $25 million in back royalties and provide Televisa with $65 million in free ad space on Univision channels. In exchange, Televisa promised to keep its current contract with Univision which lasts until 2017.

Attorneys for Televisa claimed that Univision breached its contract by withholding the payment of over $100 million in royalties. Due to its role as content provider the Mexican firm had more leverage and thus was able to reach a deal that favored them more than Univision:

The amended programming pact should allow Univision to continue as the dominant Spanish-language broadcaster in the United States. Univision commands about 75% of the Spanish-language audience, and its Los Angeles television outlet, KMEX-TV Channel 34, ranks as the nation's No. 1 television station, beating established ABC, NBC and CBS stations…

Televisa's telenovelas generate about $750 million a year in advertising revenue for Univision. Univision is struggling amid a slowdown in advertising at a time it faces looming payments on its $10-billion debt that came from a highly leveraged buyout two years ago.

All is not entirely rosy between Televisa and Univision despite the deal; the two companies are preparing for a March trial to decide over Univision’s Internet rights to Televisa's programming.

Image- New York Times (“Spanish-language soap operas, or telenovelas, are popular shows on Univision. Televisa is Univision’s main provider of programming.”)
Online Sources- Bloomberg, IHT, Los Angeles Times, Reuters, BBC News