Report: Univision Music A Tough Sell
November 19, 2007 at 5:24 AM (PT)
Potential bidders for Spanish-language broadcaster UNIVISION COMMUNICATIONS' music assets are shaving their offer prices by at least $50 million due to concerns over its artist contracts, access to advertising on the television network and issues related to an investigation of payola at the unit, reports THE NEW YORK POST.
As the auction run by investment bank ALLEN & CO. nears its final stages, a half-dozen financial and strategic suitors remain involved in the bidding for UNIVISION MUSIC GROUP. Sources said UNIVERSAL MUSIC GROUP, which has a distribution relationship with UNIVISION MUSIC, has the inside track, but SONY BMG and WARNER MUSIC GROUP remain in the running. EMI has dropped out, sources said.
According to one source, there is uncertainty over re-signing many of UNIVISION's top-20 artists as their contracts come up for renegotiation. This source added there are licensing clauses in a significant number of these contracts that call for the rights to master recordings to revert back to the artist.
Less important, but still a factor in the sale talks, are the allegations of radio-play payola by UNIVISION's label division, FONOVISA. That was followed in AUGUST (NET NEWS 8/9), by a breach of contract suit by indie label PLATINO RECORDS, which is distributed by UNIVISION. The claim alleges PLATINO was financially punished by UNIVISION after PLATINO owner ALBERTO MITCHELL testified against the company in the suit by a former exec alleging that he was fired after refusing to bribe programmers.