Mexico’s Televisa will get a chance to make its case to a US federal court jury that its contract giving Univision exclusive US rights to its programming through 2017 should be thrown out. US District Judge Philip Gutierrez last week denied a motion by Univision to dismiss allegations by Televisa that Univision had made material breaches of the contract, which has been in place since 1992. The judge’s ruling doesn’t mean that the contract will be voided, but it does mean that a jury will get to hear the case and decide whether Univision acted in bad faith and broke the terms of the contract. “In particular, Televisa has presented evidence raising fact issues on the materiality issue based on Univision’s bad faith motivations underlying its failure to account to Televisa for royalty payments, the unauthorized editing of Televisa programming, and the obstruction of Televisa’s attempts to obtain an independent audit. The Court finds such evidence sufficient to withstand summary judgment,” Judge Gutierrez said in refusing to throw out the lawsuit. The jury trial is currently scheduled for March 2008.
Televisa sued Univision in 2005 alleging underpayment and other contract violations. Televisa, which had owned more than 10% of Univision, was part of a bidding group which lost out to the winning private equity consortium when all of Univision was sold for 13.7 billion bucks in 2006. If it can get out of the long-term programming contract with Univision, Televisa has indicated that it wants to launch its own television service in the US. Televisa programs are major money-makers for Univision, amounting to about 40% of its TV ad revenues.