TV Azteca

Infobox Network
network_name = TV Azteca
network_
country = Mexico
network_type = Broadcast television network
available = National; also distributed in the United States and certain other North American countries
owner = Television Azteca, S.A. De C.V.
key_people = Mario San Román (CEO)
launch_date = 1968
founder = Ricardo Salinas Pliego
past_names = Imevisión (1968—1993)
brand =
website = [http://www.tvazteca.com/ www.tvazteca.com/]

TV Azteca is the second largest Mexican television network. It was established in 1983 as the state-owned Instituto Mexicano de la Televisión ("Imevisión"), a holding of the national TV networks channel 13 (1968, state-owned since 1972) and 7 and was privatized under its current name in 1993. Its flagship program is the newscast "Hechos".

In Mexico the network operates two stations: XHDF ("Azteca 13") and XHIMT ("Azteca 7"). Both enjoy near national coverage, mostly via over the air TV, cable TV, and DBS. It also operates digital television stations Azteca 24 HD (XHIMT-DT) and Azteca 25 HD (XHDF-DT). Azteca 13 can also be seen live online via TV Azteca's website.

The network also operates "Azteca 13 Internacional", reaching 13 countries in Central and South America.

TV Azteca subsidiaries include the Azteca América network in the United States (co-owned with Pappas Telecasting); Todito.com, a web portal for North American Spanish speakers; and Unefon, a Mexican mobile telephony operator focused on the mass market.

Privatization Process

On July 18, 1993, Mexico's Finance Ministry (Secretaría de Hacienda y Crédito Público or SHCP) announced that Radiotelevisora del Centro, a group controlled by Ricardo Salinas Pliego, was the winner of the auction process to acquire the "state-owned media package" that included Imevisión. The winning bid amounted to US$645 million. Rival bidders included:
* Grupo Cosmovision, which came in a distant second place with its US$495 million bid.
* Grupo Medcom, affiliated to Grupo Radio Red, controlled at the time by Clemente Serna Alvear, and came in third with its US$454 million bid.

TV Shows produced by TV Azteca

*La vida es una canción
*Lo que callamos las mujeres
*Ventaneando
*Hechos
*Venga la alegría
*La Academia
*Se Busca Un Hombre
*El Rival Más Débil (Weakest Link)
*Mientras Haya Vida
*Va que Va
*Famosos en Jaque
*DeporTV
*Los Protagonistas
*Chiflando y Aplaudiendo
* Los 25 mas

Programs formerly produced by TV Azteca

*A Ganar Con Omar
*Nexos
*Ay caramba!
*En Caliente
*Jeopardy!
*La Venta Increíble
*El Conquistador del Fin del Mundo
*Estrellas de Novela
*Chiton
*Cada Mañana
*AM
*Domingo Azteca
*El Ojo del Huracán
*Con un Nudo en la Garganta
*Hidden Passion
*High School Musical Mexico

Financial improprieties allegations

On 5 January 2005 the U.S. Securities and Exchange Commission (SEC) accused TV Azteca executives (including chairman Ricardo Salinas Pliego) of having personally profited from a multi-million-dollar debt fraud committed by TV Azteca and another company in which they held stock. The charges are among the first brought under the provisions of the Sarbanes-Oxley Act of 2002, introduced in the wake of the corporate financial scandals of that year.

On April 28 2005 the [http://www.cnbv.gob.mx/ Comisión Nacional Bancaria y de Valores] (CNBV), the Mexican Banking and Securities Commission, notified TV Azteca, Ricardo B. Salinas, Chairman of the Board, and Pedro Padilla L., Board Member of the Company concerning financial penalties being imposed in connection with administrative procedures that were brought by the CNBV in late January 2005 arising from alleged violations of the Mexican Securities Law as a result of transactions that occurred in 2003 among Unefon, Nortel and Codisco. The aggregated amount of the financial penalties equals approximately US$2.3 million, of which the CNBV intends to impose upon TV Azteca a penalty equivalent to approximately US$50,000.

April 30 2005, Finance Secretary Francisco Gil Díaz asked prosecutors to bring criminal charges against TV Azteca Chairman Ricardo Salinas Pliego on allegations he used privileged information to trade shares, people familiar with the matter said.

Gil Díaz's fiscal prosecutor filed the 1,200-page request to charge Salinas Pliego, who controls the No. 2 broadcaster, with the Attorney General's Office (PGR) April 27, said the people, who asked not to be identified. Regulators yesterday separately fined Azteca, its chairman and board member Pedro Padilla US$2.3 million for securities law violations.

The proposed criminal charges go beyond a civil suit brought by the SEC on January 4 that accused Salinas Pliego and his company of securities fraud for hiding a transaction that netted him US$109 million.

Just a few days before the charges were formalized, TV Azteca dennounced a blackmail attempt by Gil Díaz to avoid the transmission of an investigation by Azteca's reporter Lilly Téllez of alleged corruption acts during the 1994 economic crisis in Mexico. According to TV Azteca, the charges made by Gil Díaz were in retaliation for the transmission of Téllez report. The rest of the media found the accusations incredibly weak and, given the timing, suspicious: their proof was an unsigned document printed on plain paper stating the terms of the blackmail, supposedly given to a TV Azteca representative by Gil Díaz himself in his own office.The case will test the country's insider-trading legislation for the first time since the government toughened the law in 2001 to criminally prosecute violators.

"There's recognition worldwide that until securities law violators are prosecuted criminally, civil enforcement will have a limited deterrence effect," said Jacob Frenkel, a former U.S. federal prosecutor and SEC enforcement lawyer who is now a partner at Shulman Rogers in Rockville, Maryland.

Legal and commercial problems with TVM and CNI

In 1998, TV Azteca had a commercial alliance with Javier Moreno Valle who had serious financial problems with his enterprises, Televisora del Valle de México (Mexican Valley's TV, TVM) and Corporación de Noticias e Información (News and Information Corporation, CNI), the contract was to sell spots and advertising in TVM of TV Azteca's sponsors, TV Azteca invested 25 million dollars in TVM for re-estructuration and acconditioning of high TV technology in TVM's installations in Cerro del Chiquihuite in Mexico City as part of the contract.

In 2000 TVM unilaterally broken the contract and commercial relations with TV Azteca because, in words of Javier Moreno Valle, TV Azteca don't accomplished the contract clauses, reporting red numbers in its financial documents, and he takes of new the channel signal to re-transmite their programs. TV Azteca launch a judicial demand against TVM and Javier Moreno Valle for fraud of 25 million dollars given to TVM, a verdict of an international court in Paris, resolved that TV Azteca can take the control and operation of the signal of channel 40 in UHF band, because TVM don't return 25 million dollars and don't accomplished the contract clauses, but later the signal was returned to TVM because the electromagnetic spectre of channel 40 was given to Javier Moreno Valle and Televisión del Valle de México in 1993, for the Mexican government and the Communications and Transport Ministry (SCT) of Mexico, have registered that Televisora del Valle de México is owner of the permission to operate the electromagnetic spectre of channel 40. Nowadays, Javier Moreno Valle have a apprehension and extradition orden by the Mexican government for fraud against the Mexican Treasury Department (SHCP), and continues the legal conflict for the control of Televisora del Valle de México and its installations, but 2008 ends the contract between both enterprises.

Illegally, TV Azteca nowadays operate completely the signal and installations of Televisora del Valle de México because never bought this enterprise and its permissions to operate the channel spectre.

Unefon

Salinas Pliego, 49, made a US$109 million profit in 2003 after buying debt that TV Azteca phone unit Unefon SA owed to Nortel Networks Corp. for a discounted price, and then receiving repayment from Unefon at full value three months later, the SEC said in January. The SEC alleged Mexico City-based TV Azteca, whose shares trade in both Mexico and the U.S., failed to tell shareholders about the transaction.

The SEC requires companies to disclose so-called relatedparty transactions because they may involve conflicts of interest.

Dan McCosh, a spokesman for Salinas Pliego and the companies he controls, declined to comment on the possibility of criminal charges. Salinas Pliego and TV Azteca denied any wrongdoing Thursday and said they would appeal the administrative fines imposed by regulators, according to a statement sent to the Mexican stock exchange.

In September, Salinas Pliego told reporters he wasn't concerned about the SEC investigation. "We are totally convinced we acted correctly, and we are going to defend ourselves," he said.

EC Fraud Charges and Downgrades

Mexican regulators started investigating Salinas Pliego and the companies he controls in December 2003, after TV Azteca's outside lawyers publicly expressed concern about the Unefon debt transaction.On January 5, 2005, Ricardo Salinas Pliego was charged with fraud by the SEC [ [http://www.nytimes.com/2005/01/05/business/media/05azteca.html The New York Times > Business > Media & Advertising > Chairman of TV Azteca Is Charged With Fraud ] ] .

Analysts from Merrill Lynch & Co. Inc., JPMorgan Chase & Co. and Deutsche Bank reduced their recommendations on TV Azteca stock on Jan. 8, 2004, after the company disclosed details of the Unefon transaction, sending the shares 11% lower that day to 5.52 pesos. TV Azteca fell 2.8% in trading today to 5.49 pesos, down 22.4% this year. Its American Depositary receipts fell 13 cents, or 1.6%, to US7.99.

Gil Díaz asked Congress last month to revise legislation to expand shareholder rights and facilitate company share listings to spur the stock market. The changes would add to amendments made in 2001 that defined the information controlling shareholders and companies must disclose to minority investors.

The bill that Gil Díaz is now proposing would replace Mexico's 30-year-old securities law and reduce by two-thirds, to 5%, the amount of stock shareholders must own to bring lawsuits against company executives, among other provisions. He said the new law won't be as strict as U.S. legislation.

Federal Law on Radio Television

TV Azteca is infamously known for its attacks on Javier Corral (ex Congressman, PAN) for his opposition to the Ley Federal de Radio y Televisión (LFRT). The latter was a proposal of law concerning the licensing and regulation of the electromagnetic spectrum. The LFRT was favourable to both TV Azteca and Televisa (who together control 95 percent of all television frequencies) because it allowed them to renew their licenses without paying for them. Javier Corral, by leading the campaign against the LFRT, became the object of attacks by TV Azteca.These attacks were of such nature that the Permanent Commission of the Congress of Union had to vote an 'Agreement Point' (non binding resolution), condemning the overtly propagandistic campaign by the 'TV broadcasters' against Corral and another ex-Senator, Manuel Bartlett. However, in the original proposal of 'Agreement Point', only TV Azteca was mentioned, for Televisa did not attack either of the former. [ [http://www.milenio.com/mexico/milenio/firma.php?id=518826 Milenio Article] ] [ [http://www.reforma.com/editoriales/nacional/778321/ Milenio Article] ]

According to The Economist, the Ley Federal de Radio y Televisión "raced through Congress confirming the country's longstanding television duopoly" and constituted a "giveaway of radio spectrum and a provision that allows broadcasting licenses to be renewed more or less automatically". [ [http://www.economist.com/world/la/displaystory.cfm?story_id=9257810 The Economist article on the Ley Federal de Radio y Televisión] ]

References

See also

*"La Academia", one of TV Azteca's most popular programs
* List of programs broadcast by TV Azteca
* List of TV Azteca affiliates
* Televisa, rival network of TV Azteca

External links

* [http://www.tvazteca.com/ Official Site]
* [http://www.irtvazteca.com/ Investor Relations]
* [http://www.sec.gov/news/press/2005-1.htm SEC accusation]
* [http://www.crtc.gc.ca/eng/NEWS/RELEASES/2004/r040715.htm Denying of the Azteca 13 Internacional by Canadian Authorities]
* [http://news.bbc.co.uk/2/hi/business/4147975.stm SEC accuses Mexican firm of fraud] (BBC)
*es icon [http://www.tvazteca.com/programas/barrapolitica/mitoshechos/denuncia.pdf TV Azteca's legal accusation against Francisco Gil Díaz] (PDF format)