Owners to Sell KMEX-TV, Four Sister Stations : Sale of Spanish-Language Outlets Comes Amid FCC Ruling to Lift Licenses

Under pressure from a federal judge, the squabbling owners of Los Angeles television station KMEX and four other Spanish-language stations across the country have agreed to sell the outlets, sources close to the situation said Friday.

The sale of the five stations--which could bring as much as $400 million--would end the acrimonious infighting among the stockholders that was touched off by a lawsuit filed in 1976 over company profits and policies.

More importantly, the owners hope that the sale would resolve the objections of a Federal Communications Commission administrative law judge, who in January ordered that the stations’ broadcasting licenses be stripped because they are controlled by foreign interests.

The other four stations are KFTV-TV in Fresno, WLTV-TV in Miami, KWEX-TV in San Antonio and WXTV-TV in Paterson, N.J., a suburb of New York City.

The owners are appealing the decision by Judge John H. Conlin, who ruled that the family of Mexican media baron Emilio Azcarraga had established an “abnormal relationship” with the TV stations owned by Spanish International Communications Corp. that made them dependent on the family’s influence and direction.

The stations receive the bulk of their programming and support from Televisa, the giant Mexican TV network that the Azcarraga family controls.

Prospective Buyers in Court

A Century City attorney, Ronald L. Fein, has been selected to preside over the sale, and sources close to the situation said he was busy Friday setting up a process to handle bids from prospective buyers. He was unavailable for comment.

Several groups of prospective buyers were in the Los Angeles courtroom of U.S. District Judge Mariana R. Pfaelzer earlier this week when intense negotiations went on among the warring stockholders over whether to sell the stations. The judge has been pressing the two principals in the dispute--Reynold (Rene) Anselmo, who recently stepped down as head of SICC after 16 years in the post, and Los Angeles businessman Frank Fouce, an SICC stockholder--to settle the lawsuit out of court.

The acrimony began in 1976 when Fouce and Bruce Corwin, head of Metropolitan Theatres, accused Anselmo and Azcarraga in a federal lawsuit of fraudulently making deals in which they profited through the Spanish International Network (SIN)--which provides programming to the SICC and other Spanish-language stations in this country--at the expense of SICC stockholders.

Anselmo, a U.S. citizen who owns 24% of the SICC stock, also controls 25% of the SIN stock.

The remaining 75% in SIN is held by Televisa, the Mexican firm controlled by the Azcarraga family that operates a commercial TV network and more than 100 TV stations in that country.

The Azcarraga family also owns 20% of SICC. Under U.S. law, foreign nationals are prohibited from owning more than 20% of broadcast stations in this country. But there is no prohibition about foreign ownership in TV networks.

Did Not Pay for Programming

As an example, the case alleges that a SIN affiliate in Sacramento received Mexican programming from an SICC station without paying SICC for it.

A breakthrough in the talks occurred Wednesday when the stockholders agreed that the stations should be sold and that Fein would be in charge of the sale, the sources said.

Among the groups interested in purchasing the stations is a Los Angeles group that reportedly includes outgoing U.S. Ambassador to Mexico John Gavin.

Alhambra businessman Enrique (Hank) Hernandez, a former Los Angeles police lieutenant who owns several security-related businesses, said his group has made an offer “in excess of” $266 million so that Latinos will retain control and direction of the stations. Some of the SICC board members are Latino, as is the management of the individual stations.

“I am committed to keeping the stations in the hands of Hispanics as a good public and social service,” he said.

Hernandez would not directly respond to reports that Gavin, whom he described as a “good friend,” was part of his group of buyers. But he did say in an interview Friday:

“He is a good public servant, and I would welcome him as an investor. I’ll have more to say after May 31 (when Gavin leaves his post in Mexico City).”

Hollywood executive A. Jerrold Perenchio, who along with producer Norman Lear tried to engineer a $453-million unfriendly takeover last year of the Detroit-based Evening News Assn., publisher of the Detroit News, is also interested in purchasing the stations, sources said.

He and Lear sold a host of major television properties and a fledgling movie business last year to Coca-Cola Co. for $485 million in cash and stock.

Perenchio is a partner in a Spanish-language TV station in the New York area, WNJU, a competitor of WXTV, the SICC station there.

Among other potential buyers is a Reno-based company, Western Communications Inc., which at one time operated a Spanish-language TV station in San Juan, Puerto Rico.

A representative of the company, John Herklotz, said he is eager to meet with Fein to examine the stations’ financial records and tender a “viable” offer for the stations.