• by Paul Gough , March 27, 2003

Univision Communications Inc. will have to sell part of its share in Entravision in order to get the government's go-ahead to acquire Hispanic Broadcasting Corp.

The announcement, made by the U.S. Department of Justice, helps clear the way for the Miami-based TV giant to buy the HBC, which owns the nation's largest number of Spanish-language radio stations. The deal will be worth $2.3 billion. All that remains is approval from the Federal Communications Commission. The deal was supposed to close March 14 but hasn't barring approvals.

Univision is a powerhouse in Spanish-language media, with not only a TV network that reaches 97% of the nation's Hispanic households but also another broadcast network called TeleFuture, a subsidiary that owns 22 Univision and one UPN station; a cable network called Galavision and music labels and an Internet company. It also owns a little less than a third of Entravision, a California-based company that operates 49 TV stations and 55 radio stations. Entravision's revenues were about $65 million from radio stations in 2001. HBC owns and operates 63 radio stations in 15 of the top 20 Hispanic markets and a bilingual websites. Revenues were about $240 million in 2001.

The Justice Department is concerned that HBC's acquisition would lessen competition in the sale of advertising time on many Spanish-language radio stations, since HBC and Entravision compete in many areas around the country.

"The changes required by the consent decree will enable advertisers that rely on Spanish-language radio to reach their targeted audience and to continue to benefit from competitive prices," said R. Hewitt Pate, in charge of the Justice Department's Antitrust Division.

To get Justice Department approval, Univision has to sell all but 10% of its stake in Entravision within six years and convert its shares to non-voting stock. The government wants to make sure Univision won't steer Entravision policy and actions or influence its radio business.

The Department of Justice deal has nothing to do with Univision's TV affiliate agreements with Entravision, which owns the most Univision affiliates.