FCC Again Divides on Party Lines to OK Latino Media Merger

23 September 2003

Yet again exposing its party-driven decision process, America’s Federal Communications Commission, riven by three votes to two, approved the $3.5 billion acquisition of Hispanic Broadcasting Corporation by Latino rival Univision Communications.

To the accompaniment of raised eyebrows, no disposals or other significant conditions were imposed on the newly combined company, which creates a massive new multimedia presence in the America’s Spanish-speaking sector, arguably the fastest growing market in the nation.

The giant hybrid will combine at least 63 of the 65 radio stations owned or operated by Hispanic Broadcasting with Univision's two broadcast-TV networks, cable network, record labels and 53 TV stations – most being market leaders in their fields.

The FCC’s Republican majority maintain there is no separate Spanish-language media market in the US. In the absence of which there is nothing to be dominated by the new colossus.

The deal “will give Hispanic media a better opportunity to compete against big media companies, capturing more advertising revenue to allow it to expand unique language and cultural offerings to its audiences,” claim the GOP trio led by FCC chairman Michael K Powell.

The FCC’s two Democrats are outraged, insisting that the merged company will have undue control over Hispanic media. “This FCC just can’t say no to media consolidation and ignores the obvious reality that language should amount to a different market entirely,” fumed commissioner Jonathan Adelstein.

The merger could yet be challenged in Congress. According to Representative Robert Menendez (Democrat, New Jersey) and chairman of the House Democratic Caucus, the FCC’s approval ended “the hopes for a competitive environment in the Spanish-language media market.”

He aims to introduce the House version of a Senate bill requiring public hearings on the impact of media mergers on minorities.

Meantime, two smaller Spanish-language broadcasters, NBC-owned Telemundo and radio group Spanish Broadcasting System have expressed their disappointment with the FCC’s ruling and are mulling their legal options.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff