Grupo Clarin presents plan to split into 6 parts, vows to keep fighting anti-monopoly law

BUENOS AIRES, Argentina – Argentina’s Grupo Clarin announced Monday how it would break itself into six separate companies to comply with the country’s law against broadcast media monopolies.

Clarin lost its four-year legal fight last week when the Supreme Court upheld the law in its entirety. But the company still calls the law unfair and says it may pursue new challenges as the government seeks to dramatically reshape Argentina’s broadcast media industry.

“Grupo Clarin has decided to separate its audiovisual licenses into six different business units, each one respecting the limits” of the media law, Clarin announced. “It’s a decision forced upon us by the circumstances. We are convinced that in no civilized country can the state retroactively refuse to recognize the licenses it granted, that have years still go. They didn’t even do this in countries like Venezuela or Ecuador.”

The media law limits the number of radio, broadcast television and cable television licenses that can be held by the same owner, and enables the government to auction off licenses of those that don’t comply.

It isn’t clear whether creating separate business units within the same corporation would satisfy the government of President Cristina Fernandez, whose fight with Grupo Clarin’s news outlets has dominated the country’s political discourse for years.

The licenses are essential to Clarin’s cable television networks, and synergy between the finances and news content of the group’s TV and radio stations, websites and newspaper are key to its power. Many government supporters want nothing less than Clarin’s defenestration as a viable opponent.

The law says licenses can’t be transferred without approval, and that any changes must avoid vertical and horizontal concentrations of private media power.

Argentina’s top broadcast reguator, Martin Sabbatella, celebrated Clarin’s announcement and said his agency will review it within 120 days.

“Today we are all equal under the law,” he declared in a statement. “It ends that ugly sensation that many Argentines have felt, that on one side we mortals had to comply with the law like it or not, and on the other some believed that 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 justices also included warnings for the government in their ruling, saying that companies giving up licenses must be fairly compensated, with oversight from a truly independent broadcast media regulator, and with a transparent and equitable distribution of government subsidies and advertising. Otherwise, the court warned, the law will only convert those surviving media companies into “government mouthpieces.”

The regulatory agency is dominated by appointees of Fernandez, who has fostered a huge expansion of pro-government media in the last few years while denying government support to opposition voices. By Clarin’s count, 80 per cent of Argentina’s media are now directly or indirectly beholden to the government for financial survival.

But Sabbatella, who was chosen by the president, denied any lack of independence or fairness when questioned about this after the ruling.

Clarin said it won’t implement the breakup plan until it has to, and simply presenting it should fend off a government takeover for now.

Meanwhile, it said it plans to return to court insisting that changes be overseen by “an authority that is independent, impartial and technically competent, and that can insure transparent and equal treatment under the law, which is contrary to what is happening today.”

Grupo Clarin’s six units would look like this:

— Arte Radiotelevisivo Argentino, including broadcast channels in Buenos Aires, Cordoba and Bariloche; the Todo Noticias cable channel; Radio Mitre’s AM and FM frequencies in Buenos Aires and Cordoba, and FM in Mendoza; along with 24 local cable licenses in other municipalities.

— Cablevision and Fibertel, which bundle Internet and Cable TV services nationwide. This unit would keep no more the legal limit of 24 cable licenses and include Metro, the local cable channel in Buenos Aires.

— A third unit with 20 other TV licenses currently held by Cablevision.

— A fourth unit including the group’s other signals, along with TyC Sports and TyC Max, which held exclusive rights to show Argentine football on pay TV until the government wrested control and began subsidizing “Football for Everyone.”

— A fifth with FM licenses in Argentina’s second-tier cities.

— A sixth with two broadcast TV stations in other cities.