Mergers and Acquisitions

Mergers and Acquisitions

The first experimental television transmission in Mexico—from Cuernavaca to Mexico City—was arranged by Francisco Javier Stavoli in 1931. Stavoli purchased a Nipkow system from Western Television in Chicago with funding from the ruling party, the Mexican Revolutionary Party, which became the current Institutional Revolutionary Party. In 1934 Guillermo Gonzalez Camarena built his own monochromatic camera; by 1939 Gonzalez Camarena had developed a trichromatic system, and in 1940 he obtained the first patent for color television in the world. In 1942, after Lee deForest traveled to meet with him in order to buy the rights, he secured the U.S. patent under description of the Chromoscopic Adaptors for Television Equipment. In 1946 Gonzalez Camarena also created XE1GGC-Channel 5, Mexico’s first experimental television station, and started weekly transmissions to a couple of receivers, built by Gonzalez Camarena himself, installed at the radio stations XEW and XEQ and at the Mexican League of Radio Experimentors. The first on-air presenter was Luis M. Farias, and the group of actors and actresses performing in those transmissions were Rita Rey, Emma Telmo, Amparo Guerra Margain, and Carlos Ortiz Sanchez. Gonzalez Camarena also built the studio Gon-Cam in 1948, which was considered the best television system in the world in a survey done by Columbia College of Chicago.

Bio

In 1949, another broadcasting pioneer, Romulo O’Farrill, obtained the concession for XHTV-Channel 4, the first commercial station in Mexico, which was equipped with an RCA system. XHTV made the first remote-control transmission in July 1950 from the Auditorium of the National Lottery—a program televising a raffle for the subscribers of O’Farrill’s newspaper, Novedades. The first televised sports event, a bullfight, was transmitted the following day. In September 1950, with the firm Omega and the automobile-tire manufacturer Goodrich Euzkadi as the first advertisers, XHTV made the first commercial broadcast, the State of the Union Address of President Miguel Aleman Valdes.

By the late 1980s, the entire telecommunications infrastructure in Mexico consisted of 10,000 miles of microwaves with 224 retransmitting stations and 110 terminal stations, the Morelos Satellite System with two satellites and 232 terrestrial links, 665 AM radio stations and 200 FM radio stations, 192 television stations, and 72 cable systems.

From the time of the earliest experiments, the television system in Mexico has been regulated by article 42 of the Mexican Constitution, which stipulates state ownership of electromagnetic waves transmitted over Mexican territory. This law is supplemented by article 7 of the 1857 Constitution, which deals with freedom of the press, a perspective that became more restrictive as article 20 of the 1917 Constitution. In 1926 the Calles administration produced the Law of Electrical Communications. And the first document that specifically addresses the television industry, the “decree which sets the norms for the installation and operation of television broadcasting stations,” was drafted by the Aleman administration in 1950. The current Federal Law of Radio and Television was originally formulated in 1960 during the Lopez Mateos administration, introducing limits to advertising. This law was drastically altered in 2002 by the Fox administration, complying with the proposals of private broadcasters.

Even within the structure of these regulations, television in Mexico has been dominated by a handful of powerful individuals and family groups. The most significant of these is the Azcarraga family. Television station XEW began operations in 1951 under the direction of Emilio Azcarraga Vidaurreta, who already owned the radio station with the same call letters, one of 13 radio stations under his ownership in the northern part of the country. Azcarraga had strong links with the U.S. conglomerate Radio Corporation of America (RCA) and had been the founding president of the Chamber of the Radiobroadcast Industry in 1941. He was also influential in the creation of the Interamerican Radiobroadcasting Association and, with Goar Mestre of Cuba, was considered one of the two most powerful media barons in Latin America. XHGC was founded in 1952 by Gonzalez Camarena, who was considered a protégé of Azcarraga and had worked as a studio engineer in his radio stations. Telesistema Mexicano was born in 1954 with the integration of XEW-TV, XHGC-TV, and, a year later, XHTV.

Although these stations and systems operated under the laws requiring state ownership of the airwaves, in 1950 Mexico adopted a commercial model of financial support. This decision came two years after, and despite the conclusions of, the report issued by the Television Committee of the National Fine Arts Institute. The report criticized the commercial model of the American television industry, favoring instead the public television system of the United Kingdom. The Television Committee had been formed at the request of President Aleman and was chaired by Salvador Novo, who was assisted by Gonzalez Camarena. In the judgment of the committee, commercial programming was the “simple packaging of commodities with no other aspiration.” Later, Novo would characterize Mexican radio as “spiritual tequila” and television as the “monstrous daughter of the hidden intercourse between radio and cinema.”

In 1973, 23 years after having committed to this model of commercial support, Television Via Satellite, S.A. (Televisa), was created as a result of the fusion of Telesistema Mexicano and Television Independiente de Mexico (TIM). TIM was the media outlet of the Monterrey Group, the most powerful industrial group in the country, and consisted of XHTM-TV (which started in 1968), two more stations in the interior, and the additional 15 television stations of Telecadena Mexicana, S.A. This network was founded by film producer Manuel Barbachano Ponce in 1965 and was purchased by TIM in 1970. The fusion of Telesistema and TIM was preceded by strong criticisms of programming and advertising by several public officials, including President Luis Echeverria, in 1972.

Emilio Azcarraga Jean became the president of Televisa after the death of Emilio Azcarraga Milmo in 1997, its founding and only president, except for a short period in 1986 and 1987, when Miguel Aleman Velasco—son of the president who opted for the commercial model—replaced him. In addition to its dominant role in the television industry, Televisa has operations in sectors as diverse as the recording industry, soccer teams (America, the winningest team in the country’s history; Necaxa; and Real San Luis), a sports stadium with a capacity for 114,000 spectators, a publishing house, newspapers, billboard advertising companies, Cablevision, a cable television system, film studios, video stores, and direct broadcast satellite, among others. Moreover, the Televisa empire extends beyond the boundaries of Mexico. Televisa’s board has a new look after the exit of the Aleman, O’Farrill, Diez Barroso, and Canedo families and the entrance new names, such as Asuncion Aramburuzabala, cice chairwoman; Alfonso De Angoitia, chief financial officer; Raul Rodriguez, chief executive officer of radio; and Pablo Vazquez, chief executive officer of Innova. Besides the strategic alliance with Carlos Slim, the wealthiest businessperson in Mexico, the list of foreign stockholders now includes Bill Gates, who holds a 7 percent share.

The first experience of Televisa outside its home country was the creation of what is known today as Univision, a system of Spanish-language television operations in the United States. The move of Azcarraga to the United States coincided with a new strategy to grow internationally while diversifying in the national market. The original operation started in 1960 as Spanish International Network Sales (SIN) with stations in San Antonio and Los Angeles and three more besides the affiliates. The link between Televisa and SIN/SICC was in a hiatus for some time after a lawsuit focused on Azcarraga’s potential violation of U.S. regulations preventing foreign citizens from holding controlling interests in U.S. media industries. Within a matter of years, however, Televisa not only recovered Univision but also added Panamsat in 1985 and made substantial investments in Chile, Peru, Spain, and Venezuela. Tele Futura was recently added to the cable channel Galavision as U.S. outlets linked to Univision.

After being dominated by Televisa for 23 years, a duopoly emerged with TV Azteca as the competitor. The quasi monopoly of Televisa in the Mexican television industry was broken in 1994, when the Salinas administration privatized a media package that included Channels 7 and 13 as well as a chain of film theaters. The winning bid was presented by Ricardo Salinas Pliego, president of the electronics manufacturer Elektra and the furniture chain Salinas y Rocha. Salinas Pliego won the bid despite having no experience in the broadcast industry, a qualification required by rules issued by the federal government. Among those who lost the bid were families with a long history in the broadcast industry, such as the Sernas and the Vargas families. Some of these irregularities were coupled with the revelation by Raul Salinas de Gortari—brother of Carlos Salinas de Gortari and the main suspect in the assassination of Jose Francisco Ruiz Massieu—that he had engaged in financial transactions with Salinas Pliego shortly before and after the privatization. The revelation of this information by Televisa (quoting U.S. newspapers and newscasts) caused a war of accusations between Televisa and the Salinas Pliego group, a war that calmed down after the intervention of the secretary of the interior and President Ernesto Zedillo himself.

Televisa had experienced a similar conflict in 1995 with Multivision, the wireless cable firm owned by the Vargas family. Multivision asked for the nullification of several dozens of new concessions of stations given to Televisa at the end of the Salinas administration. Televisa counterattacked by accusing Multivision of receiving concessions for wireless cable and other services without following correct procedures. After initiating mutual lawsuits, Televisa and Multivision reached a truce with the mediation of the secretary of the interior. The most spectacular conflict, however, occurred between TV Azteca and CNI-Channel 40 when the former took over the transmission facilities of Mount Ciquihuite of the latter with an armed commando in December 2002 because of some disagreements about the interpretation of a programming contract. The Fox administration waited ten days before reacting. A judge gave the facilities back to CNI and imprisoned eight employees of TV Azteca after the federal authorities appeared to be afraid of acting forcefully against TV Azteca.

In addition to these private, commercially supported television systems, a smaller, public system is also in place. The first public television station was Channel 11, started in 1958 by the Instituto Politecnico Nacional (National Polytechnical Institute). In 1972 the Echeverria administration created Television Rural del Gobierno Federal, which later became Television de la Republica Mexicana, and purchased 72 percent of the stock of XHDF-Channel 13 through SOMEX. It later added Channels 7 and 22 and became Instituto Mexicano de Television (Imevision). Although Imevision was owned and operated by the government, it emulated the programming of Televisa. The Salinas administration privatized Imevision, which became TV Azteca, and handed XEIMT-Channel 22 to a group of scholars, artists, and intellectuals.

Although there were some cable television operations in the northern state of Sonora by the late 1950s, the industry has been dominated by Televisa through Cablevision since its creation in 1970. This operation has had its main competitor from direct broadcast satellite delivery, primarily from Multivision, owned by the Vargas family. Multivision has greater market penetration and offers more channels than its counterparts in countries such as the United States. In 1996 Televisa created a joint venture with News Corporation, Rede Globo (Brazil), and TeleCommunications, Inc. (TCI), to create a direct broadcast satellite service for Latin America. Multivision became part of the rival operation DirecTV, along with the Cisneros Organization (Venezuela) and Television Abril (Brazil). There have been talks to merge both satellite services in the near future.

Much of Televisa’s dominance in Mexican television comes from its role as a production and distribution company. It provides over 12,000 hours of television programming each year, of which only 13 percent are imports. Media scholar Florence Toussaint says that the soul of Televisa resides in its programming. She points out that the organization offers an apparent diversity through the four channels (Channels 2, 4, 5, and 9 in Mexico City), with 118 titles in 455 hours each week. Toussaint argues, however, that among and within all these programs, a singular discourse is being elaborated, one that propagates a determinate view of the world. Plurality, she suggests, is not its goal, and all the different shows in the various genres are, in fact, similar. This is especially true of the soap operas (telenovelas), the main programming form of Mexican television. (The production and distribution of melodramatic telenovelas places Televisa among the top five exporters of television programming in the world; the programs are exported not only to the Americas but also to countries that include China and Russia.) This particular genre can be seen to prescribe the gender roles and the aspirations that the social classes should have. Bourgeois values and symbols are the ideal, the goal, and the measure of failure or success.

Different critical perspectives move away from this analysis, which assumes a passive audience. The alternative points of view, influenced by British and American cultural studies and the works of Jesus Martin-Barbero, Nestor Garcia Canclini, Jorge Gonzalez, Guillermo Orozco, and Rossana Reguillo, point out specificities of Latin American popular culture found in the form. Telenovelas, for example, were modeled after radionovelas, the primary of example of which, El Derecho de Nacer (The Right to Be Born), was broadcast at the beginning of the television era in the 1950s. Although the first telenovela in its current format was Senda Prohibida (Forbidden Road), other forms of television drama appeared as early as 1951, starting with the detective program Un muerto en su tumba (A Dead Man in His Tomb). The first serial drama was Los Angeles de la Calle (Street Angels), which ran from 1952 to 1955.

Telenovelas expanded to prime time and included male viewers as part of the target audience in 1981 with Colorina. Besides the melodrama, there are other subgenres in the telenovela—the historical, the educational, and the political—all of which, despite the explicit differences, have a melodramatic subtext. The first antecedent to this strategy of subgenres was Maximiliano y Carlota (1956) and was fully initiated with La Tormenta (The Storm) in 1967. Educational telenovelas began in 1956 with a story focused on adult education, Ven conmigo (Come with Me). For the new television network, TV Azteca, one of the most successful programs among audiences and critics has been the political telenovela Nada Personal (Nothing Personal) produced by Argos. TV Azteca suffered a big blow when Argos signed an agreement with Televisa’s Cablevision to launch Channel 46-Zoom TV.

Before the privatization of TV Azteca, Channel 2, with a programming based around telenovelas, had the highest ratings in prime time at 26.8 (a 47 percent audience share), followed by Channels 5 and 4, with a younger target audience, with 17.3 (30.3 percent share) and 8.7 rating (15.2 percent share), respectively. TV Azteca, then Imevision, had a rating of 2.5 (4.3 percent share) and 1.8 (3.1 percent share) for Channels 13 and 7, respectively. By the summer of 2003, Televisa prime-time audience share amounted to 69.6 percent, airing 85 of the 100 most popular programs. In 2002, Televisa won the ratings war in every single genre and continued in 2003 to lead the reality show Big Brother II. Even after the departure of Jacobo Zabludovsky after a quarter of a century of being the most widely recognized journalist and media personality, Televisa’s newscast, now led by Joaquin Lopez Doriga, doubles the ratings of TV Azteca.

These historical developments and the complex structures of the Mexican television system have been the subject of considerable critical analysis. Most examinations of the Mexican television industry adopt a liberal pluralist approach. They claim that the relation between the authorities and the television monopoly has been fruitful for both parties, especially for the latter. They also stress that in this relation, the interests of the masses have been overlooked. Few critics have taken the simple view that the government and broadcasting have identical objectives, but most do argue that the different administrations have been tolerant and weak, allowing the monopoly greater benefits than its contributions to Mexican society. These analyses focus on several central themes. They cite ownership of media industries and management of news and information, criticizing the historical quasi-monopoly and the progovernment bias of Televisa’s newscasts. TV Azteca proved to be even more biased than its competitor with the coverage of the 2000 presidential campaign. Both networks did it again the following year, when they failed to cover the Zapatista “Tour” and spectacular entrance to Mexico City. The two firms became strange bedfellows by organizing a “peace concert” a few days before the Zapatista arrival.

The Mexican system of broadcasting has developed out of the shifting balance between the state, private investors, and outside interests, originating in the postrevolutionary period (1920–40) when foreign capital and entrepreneurs alike were looking for new investment opportunities. Whether the situation remains the same—whether the same groups remain in control of media industries in Mexico in the face of new technological developments—remains to be seen.

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