Truce: Univision, Televisa Settle Lawsuit

by David Goetzl, Jan 22, 2009, 6:23 PM

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A lengthy, oft-nasty dispute in the end won't cost Univision its most successful programming pipeline: prime-time novelas that are also popular in Mexico.

On Thursday, the Spanish-language broadcaster reached a settlement in a case against Mexican programmer Televisa--the producer of the soap operas that are popular on Univision channels. Televisa wanted out of a deal in which it gives Univision exclusive U.S. rights to its shows, in exchange for royalties on ad revenues. In short, Televisa felt it was being under-compensated and sued to break its agreement, in place until 2017.

A statement released Thursday said the settlement includes "increased payments" to Televisa. Court papers show that in 2004, Televisa received some $100 million from Univision in royalties, and perhaps 9% of ad revenues.

Univision and Televisa originally reached their deal in 1992; it was amended twice since.

The case was in federal court in Los Angeles. Exact terms of the settlement were not made available.

"We are pleased that today's settlement concludes this time-consuming litigation ... It enables Televisa to continue utilizing Univision's extensive television networks as an important distribution channel for its content into the U.S. marketplace," the statement said. "For Univision, it assures that there will be no disruption in some of its most popular and valuable programming, as well as affording Univision an ongoing pipeline of future content developed by Televisa."

At times, the dispute turned acrimonious. Charges between the parties went back and forth, with Univision in one filing accusing Televisa of thwarting its efforts to drive ad dollars by refusing to make talent available for Univision's 2005 upfront presentation.

"Televisa made good on its threats (in May 2005) and refused to produce a number of key artists, claiming they were unavailable during the period of the upfronts," Univision wrote in the court filing. "Univision learned, however, that many of the same artists appeared at another function in New York during the same time period."

Univision also charged Televisa with essentially cutting it out of product-placement revenues. Under their agreement, Televisa would be compensated for brand integrations that ran in its programming in Mexico. The shows were then passed to Univision. But Televisa would refuse Univision's requests to edit the integrations out, Univision wrote in court papers. (That provided a benefit to Televisa because it gave some of its Mexican clients added exposure in the U.S.).

In the recent third quarter, Univision's TV revenues were $397 million, down from $407 million a year ago.

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