Twist: Clarín does what gov’t says

Media conglomerate indicates its intention to divide itself into six parts to comply with law

by Federico Poore
Buenos Aires Herald, 05-11-2013

Media giant Clarín Group presented yesterday morning its own disinvestment plan following the recent Supreme Court ruling that confirmed the constitutionality of the Broadcast Media Law.
“This is a decision forced on us by circumstances,” Clarín Group Communications Manager Martín Etchevers said. “This adjustment plan does not imply we will abandon our principles or fail to defend our rights.”
Representatives from the conglomerate entered the AFSCA premises at 10.20am — as the media watchdog was holding its first internal meeting after the top court’s decision last week — and left an “adjustment proposal,” government officials explained in a news release.
The head of the AFSCA media watchdog Martín Sabbatella celebrated the news.
“This marks the end of that ugly feeling many Argentines had — that on one side we mortals had to comply with the law, whether we liked it or not, while others thought they could be above it, above the powers of the state, and that they would decide whether they would comply or not with the law,” the Kirchnerite official said.
Last week, Sabbatella had said the Clarín Group, the country’s largest media conglomerate, would not be able to submit a voluntary plan to meet the requirements under the law as deadlines had expired, but stressed it still had one way out — to “finish” the presentation that was made in December of last year by Fintech Advisory, the minority shareholder of Cablevisión, the group’s cable-television business.
Etchevers yesterday urged AFSCA to give the media giant “the same time given to other groups” during an on-air interview with Clarín-owned news channel Todo Noticias (TN).

Clarín’s proposal
“Before the ruling becomes effective, and even as the decision must have the same terms and conditions as the rest of the (media) groups, the Clarín Group presented this morning, before the courts and AFSCA, a plan to voluntary adjust to the licence regime of the Media Law,” the company said in a news release.
The company continued to insist that its presentation of a plan should not be interpreted as a change of opinion on the law itself.
“We are convinced that in no civilized country can the state retroactively refuse to recognize the licenses it granted, that still have years go. They didn’t even do this in countries like Venezuela or Ecuador.”
The company said it presented a plan within the context of “the illegal and de facto attacks carried out by the government over the last few days to take away its audiovisual media in a compulsory manner.”
Concretely, the media group is proposing to divide itself into six separate companies to comply with the anti-trust law.
The first division would include flagship broadcast television channel Canal 13, news channel TN as well as Radio Mitre and other TV channels from Córdoba and Bariloche. Twenty-four cable licences currently belonging to Cablevisión would also be part of this first media unit.
Another unit would keep a good part of Cablevisión’s operations (Fintech will maintain 40 percent of the shares of the cable company) as well as the Buenos Aires-based Metro cable channel.
The third unit would hold 20 licences that are currently held by Cablevisión, while the fourth would include cable channels Magazine, Volver, Quiero, Canal Rural, TyC Sports and TyC Max.
The fifth proposed division will include FM radio stations in Tucumán, Bariloche, Bahía Blanca and Santa Fe. The sixth and final business would include Channel 7 of Bahía Blanca and Clarín’s stake in Channel 9 of Mendoza.
The company’s proposal was signed by María de los Milagros Páez, legal trustee of the Clarín Group.

2 + 2 = 5
Soon after Clarín presented its plan, it became clear that it did not include all of its licences — regardless of whether you count the 237 that AFSCA claims the conglomerate holds or the 158 the group recognizes as its own.
“Almost one hundred licences (currently held by Clarín) are missing,” legal expert Graciana Peñafort — who took part in the drafting of the law — told Radio América.
Clarín, however, disputes the claim.
“It does cover all licences — the fact that the number does not add up means that we’re choosing to make the same count as outlined in AFSCA’s regulations, meaning the group would be able to cover the same area with fewer licences,” Etchevers told the Herald.
The Clarín representative explained the media giant will claim to be using the same regulation that allowed rival cable company Telecentro to cover a wide area with a single licence.
Also worth noting is that Clarín has not yet revealed who will buy its exceeding licences.
“It is not explained at this point of the plan,” Etchevers told this newspaper. “The information will be revealed as we progress in the different steps to adjust to the law.”
Other assets such as newspaper Clarín, internet service provider Fibertel and news wire service DyN are not subject to regulation under the Media Law.

What’s next?
AFSCA’s representatives did not hide their glee at Clarín’s move yesterday.
“All groups have already presented their disinvestment plans,” Sabbatella’s spokesman told the Herald. His department now has “a lot of analyze,” the source added.
It seems AFSCA agrees with Etchevers on one point — that yesterday’s presentation was only the first part of the process, in which the media group hands in a draft, a sort of “letter of intent” through which the conglomerate shows a willingness to comply with the law and the main reasons why the group will no longer have a dominant position once it completes the disinvestment.
A “second approval” must now follow — the one where the group clarifies which company it intends to sell its licenses to, the AFSCA representative added.
The Broadcast Media Law was passed by Congress in 2009 following long debates throughout the country. Its main guidelines came from proposals made by professors, unions and other members of the Coalition for Democratic Broadcasting, which five years before had presented a 21-point programme to replace previous regulation passed by the last military dictatorship and modified during the ‘90s by the pro-market Carlos Menem administration.

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