October 25, 2014
Gov’t leaves Clarín’s plans in limbo
Media giant says CFK has slowed down approvals ahead of new AFSCA board’s meeting
Nobody said it was easy. The adjustment process initiated by media giant Clarín Group to comply with the anti-trust regulations of the Broadcast Media Law have slowed down during the past few weeks and is now almost stalled, with Clarín and the AFSCA media watchdog accusing each other of blocking progress ahead of tomorrow’s board of directors key meeting at the department headed by Martín Sabbatella.
In November last year, after a Supreme Court ruling that deemed the Media Law constitutional, the company announced its plan was to divide the conglomerate into six separate firms, a move that implied the split of its flagship cable company Cablevisión into three different units.
“We’re now going through the adjustment process and trying to divide the three companies, but lots of decisions are beyond our reach,” a Cablevisión spokeswoman told the Herald. “Government agencies have yet to OK a number of issues.”
The Clarín Group representative was referring not only to AFSCA — that last February provisionally approved the conglomerate’s proposal — but also to the Security and Exchange Commission (CNV), the Corporate Records Office (IGJ) and the CNDC antitrust watchdog agency, that need to approve the paperwork related to Clarín’s ownership of over 100 cable licences.
The government denies any intentional delays. These steps “take time” to process, a spokesman from AFSCA told the Herald.
The Telefónica case
A special case involves the so-called Unit 4, that comprises seven cable TV channels including TyC Sports, Volver, Magazine, Quiero Música and Canal Rural.
Last month, the Clarín Group filed a presentation before AFSCA calling to preserve — that is, not to sell yet — those channels, arguing the media watchdog was about to rule differently on adjustment plans presented by the Manzano-Vila Group and satellite provider DirecTV.
The department led by Sabbatella rejected Clarín’s claim outright.
“We told them there was no way we could approve such a demand — the approved plan was the group’s first and only” officially recognized plan, an AFSCA source said. The official response was more formal, rejecting the offer because it would imply “a substantial modification of the original proposal” and because “the procedure (the group) intends to roll back has concluded.”
This means the original plan of selling those cable channels to a trust fund is still on — but Clarín is taking legal steps to “guarantee its right” to bring back the process if it’s able to prove the government’s “unequal treatment” to Clarín’s licences, media expert Santiago Marino told the Herald.
Clarín is arguing, both publicly and through legal presentations, that AFSCA is choosing a more favourable interpretation of the law when dealing with other big media groups.
This opens the door for the group to buy, in the future, some of the companies they are now selling — or so the conglomerate believes.
“Throughout this process, Clarín’s primary goal has always been to buy some time until a change in the political landscape — namely, the end of Kirchnerism — allows it to cancel its adjustment process to the Media Law,” Marino added. “It has been seeking that aim through a combination of legal action, intense lobbying with politicians from the opposition and attempts at controlling judges.”
According to Marino, results have not been bad for the media giant “because the law has been little and poorly applied — something that ended up benefiting Clarín.”
This leads to the landmark case of Telefónica, arguably the second biggest media group in the country. To comply with the law, the Spanish conglomerate must get rid of broadcast TV channel Telefe, but its plan has not yet been analyzed.
“The government makes a mistake by not dealing with the Telefónica-Telefe case, which is the perfect example of the unequal treatment towards Clarín,” a source close to Marcelo Stubrin, the UCR representative at AFSCA’s board of directors, told the Herald. “This obviously has an impact on our overall judgement of the adjustment plans presented so far.”
Government representatives acknowledged that the pace of those proceedings has been slowed down “to avoid political clashes” with the Mariano Rajoy administration and to avoid further legal challenges against the Media Law.
The head of AFSCA had once described 2014 as the year of adjustment to the Media Law. Five months to go, there are few reasons to be optimistic.