FCC Rules on Ownership Loom in Duel for Univision

FCC RULES ON OWNERSHIP LOOM IN DUEL FOR UNIVISION
[SOURCE: New York Times, AUTHOR: Andrew Ross Sorkin]
The auction for Univision, which is expected to conclude tomorrow when final bids are due, has become focused in recent days on the potential regulatory hurdles that the two suitors who are dueling for control of the company may face, according to people involved in the process. At issue is whether the two groups -- one led by Grupo Televisa, Mexico's biggest media company, and another led by a group of private equity firms that control many media properties -- could, should they win the auction, face a challenge by the Federal Communications Commission over foreign ownership restrictions and concentration concerns, these people said. The Televisa consortium, which is being backed by the Venezuelan media investor Gustavos Cisneros, Bain Capital, Blackstone Group, Carlyle Group, Cascade Investment and Kohlberg Kravis Roberts, is expected to face the most scrutiny because federal regulations prevent foreign entities from owning more than 25 percent of an American broadcaster. While the group's offer is specifically being structured so that Televisa would own no more than 25 percent of Univision should it win, some Univision executives and advisers are concerned that the F.C.C. could determine that it is still acting as a controlling shareholder because of its influence over the bidding group. It is possible that the F.C.C. could force the winning group to divest overlapping assets like radio stations in certain areas and broadcast licenses in cities where it owns newspapers. Interestingly, stakes in Freedom Communications and Cumulus are also owned by the Blackstone Group, which is part of the rival bidding group for Univision. The possibility that the F.C.C. could block a deal and how long it may take the agency to approve a deal is expected to weigh on Univision's decision.
http://www.nytimes.com/2006/06/19/business/worldbusiness/19univision.html
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