Mexico’s top broadcaster, Televisa, and its U.S. licensee Univision returned to federal court in Los Angeles on Tuesday to litigate which has rights to post Televisa-made programs on the Internet.
The two companies earlier this year settled a long-running lawsuit over royalties that Univision owed to Televisa as part of the 25-year Program Licensing Agreement (PLA) signed in 1992.
The settlement did not, however, resolve a dispute over original contract language written before the Internet’s capabilities were fully known.
Univision contends that Televisa ceded to Univision the exclusive right to broadcast programs into its territories by “all electronic forms or other means now known or hereafter developed of transmission and retransmission.”
Televisa believes the PLA gives Univision rights only to distribute programs on its broadcast network, and not on the Internet, which it considers a separate “network,” according to testimony on Tuesday.
The first witness in the bench trial, held before a judge, was former Univision Chairman and Chief Executive Jerry Perenchio.
Perenchio, 78, appeared via videotaped deposition because of ill health, Univision attorneys said on Tuesday. He sold Univision to a private investor group in 2006 but retained a stake in the company.
In his testimony, Perenchio described a decades-long conflict with Televisa to protect the U.S. network’s exclusive broadcast rights, starting with Televisa’s attempt under late boss Emilio Azcarraga Milmo’s to carve out an exception for satellite transmissions.
U.S.-born Azcarraga Milmo, known as “The Tiger” for his aggressive business tactics, was one of Mexico’s leading businessmen who enjoyed for decades of a comfortable monopoly in the country’s television market helped by his top political connections.
“The signatures were barely dry before the fireworks started,” Perenchio said of the 1992 PLA agreement that sealed the partnership between Televisa, Univision and Venevision, Venezuela’s leading private television company run by the Cisneros family.
Univision’s exclusive right to the U.S. markets in the 25-year contract term was “highly important,” and “there would be no deal without it,” Perenchio testified.
The conflict escalated after Azcarraga Milmo died in 1997 and his son, Emilio Azcarraga Jean, took over the company, Perenchio said.
“They never liked it … they never thought it was fair to Televisa,” he said of the PLA. “They took the position that they had rights for their programming for the Internet.”
The two companies exchanged a series of letters but struggled to come up with a viable compromise, Perenchio said.
“One of our greatest fears is if we loose the noose, Televisa will enter the U.S. market with some or all of its programming and destroy or severely wound Univision,” Perenchio wrote in a 1999 letter to Azcarraga Jean.
He acknowledged that a 2001 amendment to the PLA, in which he did not participate, changed language that pertained to retransmission rights that Televisa retained.
Neither company has attempted to post full-length episodes of the Televisa shows on the Internet.
The bench trial is expected to conclude on Friday. A decision is not expected immediately, lawyers for both sides said.
Under the settlement of the main dispute in January, Univision paid $65 million per year worth of advertising from privately held Univision from 2009 to 2017, and signed an amended PLA giving Televisa royalty payments for more types of programming.
The case is Televisa S.A. and Grupo Televisa S.A. vs. Univision Communications, Case No. 05-3444, in U.S. District Court in Los Angeles.
