Mexicans Wait on Outcome of TV Drama

31 January 2003

A legal spat between two of Mexico’s television companies – scenes from which would not look out of place in a daytime TV soap – is keeping the nation’s media sector gripped.

In one corner, TV Azteca, the country’s second biggest network; in the other, Canal 40, a major Mexico City-area broadcaster – with the antenna used by the latter firm providing the bone of contention.

Azteca claims ownership of the antenna’s signal following a deal with Canal 40’s owner, Televisora del Valle de Mexico, in 1998. Under that agreement, TVM was to borrow $23 million (€21m; £14m) in return for offering its partner an option to buy 51% of the station’s stock. However, Azteca alleges that it has since been defrauded of the cash by TVM’s controlling investor Javier Moreno Valle.

The dispute took a new twist on December 27, when Azteca sent in heavies to seize control of the antenna. This followed a verdict by the International Court of Arbitration in Paris, which ruled Azteca’s complaint “partially justified” and its claim to the share option valid.

The exact level of force used in the takeover is still not clear. Azteca claims its security guards acted entirely peacefully; Canal 40 alleges they did not – either way, it was enough to give the spat huge publicity.

However, that was not the end of the matter. In a preliminary ruling, a Mexican judge on Monday decided Azteca should return the antenna to Canal 40, which subsequently resumed broadcasting with shots of its jubilant employees.

Aside from keeping Mexicans entertained for the last month, the dispute has also raised serious questions about the nation’s media sector and its regulation. Azteca took the law into its own hands by seizing Canal 40, but the government initially took no action. Ministers then went too far in the eyes of many analysts by ordering that the signal be shut down completely until the legal tug-of-war has come to an end.

As Azteca has vowed to fight Monday’s ruling, that may be some way off.

Data sourced from: Financial Times; additional content by WARC staff