Univision, Televisa case gets jurors

Telenovelas at stake in legal dispute

By ANNA MARIE DE LA FUENTE

HOLLYWOOD -- The jury that will decide the fate of two multibillion-dollar Hispanic media congloms was selected Tuesday at Los Angeles U.S. district court in downtown Los Angeles.

The oft-delayed face-off between U.S. Hispanic giant Univision and its longtime programming supplier, Mexican behemoth Televisa, finally kicked off with opening statements from lawyers Marshall Grossman of Bingham McCutchen for Televisa and John Keker of Keker & Van Nest for Univision.

At stake is Univision's programming lifeblood -- the Televisa telenovelas that have propelled Univision to its long-standing dominance of the U.S. Hispanic media market.

As laid out by both lawyers, the dispute centers on Televisa's claim of $134 million in unpaid royalties from Univision as well as accounting and auditing disputes.

Televisa is charging Univision with material breach of contract and wants to end its 25- year programming pact, which expires in 2017.

But as Grossman concluded, the real issue is Televisa's loss of faith in Univision. "Basically, Televisa does not trust Univision anymore," he said.

If Televisa prevails in this trial, Univision will have virtually no in-house programming to sustain it.

Present were the head honchos of both companies; media mogul Haim Saban, who heads the consortium that bought Univision in 2006, Univision's prexy and chief operating officer Ray Rodriguez, and CEO Joe Uva; Televisa was represented by CEO Emilio Azcarraga Jean, executive VP Alfonso de Angoitia, corporate VP Jose Antonio Baston and executive VP Bernardo Gomez.

Keker alleged that Televisa filed the material breach of contract lawsuit in May 2005 when Univision was up for sale to discourage other bidders and improve its chances of buying the web, a deal it lost out to Saban's consortium.

"In the end, what matters are the black and white words of the PLA (programming license agreement) and not the global ambitions of Televisa," concluded Keker.

Univision's chief financial officer Andrew Hobson and general counsel Douglas Kranwinkle are skedded to testify today (Wednesday) as is Steve Rader, co-founder and managing partner of Clarity Partners, who was a key negotiator of the programming pact between the two companies.

The trial is expected to last three weeks, according to presiding Judge Philip Gutierrez.