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Electoral bill could hurt Mexican broadcasters

MEXICO CITY, Sept 11 (Reuters) - An electoral bill being debated in Mexico’s Congress, which seeks to get free air time for political parties’ campaigns during profitable time slots, may hurt top television broadcasters Televisa and TV Azteca.

The election law overhaul, which the opposition says must be approved in tandem with a long-awaited fiscal reform, was expected to be voted on this week and could also hit radio companies, analysts said.

According to a draft of the bill obtained by Reuters on Tuesday, broadcasters will have to give three minutes of every hour between 6 a.m. and midnight free to political parties for airing spots during federal campaigns.

If TV companies air, on average, 20 minutes of paid ad spots an hour, for everything from beauty products to soft drinks, the new bill would mean 15 percent less advertising sales for them during campaigns.

Televisa's TV.NTLVACPO.MX sales last year, mostly from ads, topped $3.5 billion, with ads for the presidential campaign representing less than 3 percent of them. TV Azteca's TVAZTCACPO.MX sales in 2006 were nearly $900 million.

“The change is that they will have to grant (free air time) during more profitable spots,” said analyst Raul Ochoa with Scotia Inverlat.

As of last year, TV companies had to grant an estimated 12.5 percent of their time for political spots. They would usually broadcast them, particularly those from small parties, in the early morning when audiences and advertisers were slim.

The electoral bill discussion, which was covered heavily by Mexican media, drew acid criticism from Televisa’s legal representative, Javier Tejado.

“This is Soviet-style politics to keep the status quo,” he told lawmakers, arguing the bill would hurt smaller parties and Mexico’s democracy.

Senator Ricardo Monreal, whose leftist Party of the Democratic Revolution (PRD) lost the presidential election last year in a very tight race, said parties, government and private companies spent about 4.36 billion pesos ($393 million) in advertising related with the presidential vote.

Congressional talks over the electoral bill on Tuesday also touched on cuts to public financing for political parties and the replacement of a top official at the main electoral institute, IFE.