Televisa eyeing new U.S. Broadcast Net or a scare tactic?

Rumors about Televisa’s interest in creating a new Spanish-language network should their bid for Univision fail are running rampant in the financial circles.

I a report in the Financial Times, Televisa has a Plan B that includes potential partners such as NBC’s Telemundo, Paxson Communications and McGrawHill.

According to Wachovia Securities, the • Televisa’s Plan B is merely a scare Tactic.

Wachovia stated that several publications have reported that Televisa is looking to establish its own U.S. broadcasting network if it fails to acquire UVN. Should this occur, UVN (or its new owner) could face significant competition from a world-renowned Spanish-language programmer. We believe that Televisa’s Plan B is nothing more than a scare tactic.

PLA and Participation Agreement Are Televisa’s Hurdles.

The Program License Agreement (PLA) provides Univision with the exclusive right to broadcast certain Spanish-language programs in the United States through 2017. Furthermore, the Participation Agreement stipulates that should Televisa enter into a Spanish-language network or station transaction in the U.S. (excluding Puerto Rico), Univision must first be offered the opportunity to acquire a 50% economic interest.

Program License Agreement Should Remain Enforceable Until Expiration.

Despite the various legal battles between UVN and Televisa, we believe that UVN has taken appropriate actions to ensure that there is no legal merit to Televisa’s claim that a material breach of the Program License Agreement has occurred.

Delay In Bidding Process Is Not A Negative, In Our View.

The deadline for formal bids was moved back two weeks — to June 20 from June 8. We believe such delay relates to timing of the due diligence process and is not an issue with the alleged asking price.