On Tuesday, a spokesperson for Liberman Broadcasting, the Burbank, Calif.-based Hispanic broadcasting company known for its Estrella TV Spanish-language television network and its Regional Mexican radio stations, sent a story pitch to RBR+TVBR.
The subject: “Comcast is discriminating against EstrellaTV, a popular Spanish-language channel, and withholding compensation for carrying the channel in their Houston, Salt Lake City and Denver cable lineup.”
Strike Salt Lake City from that quote: Liberman, also known as LBI Media, has just sold the station.
In fact, Liberman agreed to sell the Salt Lake City facility — KPNZ-DT 24, licensed to Ogden, Utah — on June 7.
That’s the date appearing in an Asset Purchase Agreement filed with the FCC on Friday (6/22) that details KPNZ’s sale.
The buyer: HC2 Station Group, the rapidly growing entity led by Philip Falcone.
For viewers, there will be changes in programming, but no change in language: KPNZ is expected to transition from Estrella TV to the Azteca América network, now owned by HC2.
KPNZ uses a transmitter from atop Farnsworth Peak, to the immediate southwest of Salt Lake City. The station signed on the air in December 1998, and was an affiliate of the former UPN network. On Nov. 30, 2007, LBI Media acquired KPNZ.
The APA, which lists “KRCA License LLC” as the licensee, notes that KPNZ is being sold to HC2 for $3,325,000.
An escrow deposit of $166,250 has been made to Signature Bank.
Serving as the exclusive broker in this transaction, representing LBI Media, is Greg Guy of Patrick Communications.
LBI Media executives did not return RBR+TVBR‘s request for comment on Thursday afternoon, when reports of the sale of KPNZ had been confirmed.
LBI acquired KPNZ from Utah Communications for $10 million. Thus, it is taking a substantial loss on the TV station.
The APA includes a section on “MVPD Matters,” and HC2 will likely not have the same level of struggle with Comcast along the Wasatch Front as LBI Media experienced. LBI notes that it has “validly and timely made carriage elections for the station for all MVPDs in the station’s DMA for the 2018-2020 election cycle.”
Serving as legal counsel in the transaction are Jessica Rosenthal of Wiley Rein, representing Liberman, and Trey Hanbury of Hogan Lovells US LLP, representing HC2.
The sale of KPNZ brings to an end, at least in Utah, a prolonged fight between LBI Media and Comcast, which happens to be the corporate parent of NBCUniversal Hispanic Enterprises and its Telemundo and Universo networks.
Trouble began in late 2014, when LBI gambled by foregoing must carry status in three DMAs — Houston, Denver and Salt Lake City — by making its first-ever decision to seek retransmission consent. LBI said it opted for retransmission consent, rather than must-carry, with respect to all of its Estrella TV stations for the three-year cycle beginning January 1, 2015 because of what it perceived to be the stations’ strong ratings.
In September 2014, a LBI consultant approached Comcast to negotiate a retransmission consent agreement for the Estrella TV stations. This resulted in a plan that saw LBI seeking carriage and compensation comparable to what Comcast afforded to Telemundo—a much bigger network by ratings that this week is achieving Nielsen records thanks to its coverage of the 2018 FIFA World Cup.
In particular, LBI sought from Comcast “carriage and compensation for all Estrella TV O&Os, carriage in markets where non-owned Estrella TV broadcast affiliates not otherwise carried by Comcast operate, and carriage and compensation in ‘white areas.’”
This would have benefited LBI in such big DMAs as Philadelphia, Boston and San Francisco.
Negotiations continued until February 2015, with Comcast unwilling to expand its carriage of Estrella TV programming or to compensate Liberman for that carriage.
On February 19, 2015, Estrella TV’s Houston, Denver and Salt Lake City were dropped from Comcast’s respective channel lineups in those markets, as there was no longer a must-carry rule in effect for the stations. Comcast argued that the stations were not generating substantial viewing audiences.
LBI responded by claiming Comcast discriminated against Estrella TV, showing favoritism for its own Spanish-language TV networks — Telemundo and digital multicast offering TelExitos.
In August 2016, the Tom Wheeler-led FCC sided with Comcast, and shot down a contention from LBI that the Commission’s program carriage rules can be considered in its ongoing battle with Comcast over retransmission fees.
That order specifically dealt with KETD-53 in Denver, KZJL-61 in Houston and KPNZ-24; the FCC noted that Liberman “failed to put forth sufficient evidence of its program carriage claims to establish a prima facie case.”
On Oct. 16, 2017, Estrella TV and its parent relented by electing for must-carry status in Denver, Houston and Salt Lake City. This put the network back on Comcast systems after three years.
Still, the bad blood persists — even with the sale of KPNZ.
The Tuesday story pitch from an LBI Media representative states, “Comcast stopped carrying the local Estrella TV stations in 2015, arguing that it wasn’t on par with Telemundo, the Spanish-language channel that Comcast owns. But ratings and other evidence in the market doesn’t support this argument. What’s more likely is that Comcast is refusing to play ball with Estrella TV in order to limit competition to Telemundo. All other major pay-TV providers give Estrella TV more favorable distribution than Comcast—the only difference of course being that Comcast is the only major pay-TV provider that owns its own Spanish-language programming networks.”
The representative pointed to Houston Nielsen data, which LBI Media says show a 100% broadcast daytime ratings increase between January 2017 and January 2018 while those for Telemundo O&O KTMD-47 in Houston decreased by 29%. Further, in prime time the Estrella TV station in Houston saw its ratings rise 67%, while KTMD’s ratings decreased 25%.
LBI declined to provide actual ratings data, which could show that while the gap is narrower, a big gulf still exists between the two stations. LBI also did not share which demographic it was basing its ratings data off of.
On Thursday (6/22), Telemundo’s adults 18-49 Nielsen ratings were a 0.6/3, compared to a 0.5/2 for Univision, according to Cynopsis. Estrella TV on a national level has consistently placed far below both Univision and Telemundo.
Even so, LBI Media is ready to continue to fight.
“Ultimately, these [ratings] figures show that Comcast is discriminating against a popular channel in order to prop up its own competing content, and Comcast unlawfully benefited for three years by not carrying Estrella TV on its platform,” the LBI representative claims. “By refusing to compensate EstrellaTV fairly, it is ultimately hurting the company’s ability to create and invest in additional programming that is clearly highly desired by Houston, Salt Lake City and Denver viewers.”
With Salt Lake City now stricken from that statement, all eyes are on Houston and Denver, and if LBI Media will divest those properties as well.