Last Friday was supposed to be “D-Day” for many large companies facing a Supreme Court deadline ordering them to divest “excessive” assets according to the guidelines of a media law sanctioned by the Congress in 2009 that enjoys wide support across the political spectrum.
But according to the facts, nothing had really happened as the government planned. An appellate court suspended the divestment order last thursday until uncertain date, period in which a lower court must rule on the substantive issue: whether some articles of the law are constitutional or not.
What’s known here simply as the media law establishes that companies can´t run simultaneous media outlets in local markets and bars them from having more than 35% of the national market of paid-services customers.
The Kirchner administration says that the law is intended to break up monopolies and will pave the way for the emergence of new local media. But it´s no secret that behind the “democracy of information” speech, the government is taking on Grupo Clarín, the nation’s largest media company and President Cristina Fernández de Kirchner’s toughest opposition in her more than five years in office.
Grupo Clarín, the nation’s largest cable company, faces an economic challenge that would force the divestment of most of its lucrative TV licenses. The politics have also been brutal. Its credibility has suffered and subscriptions are down to its flagship newspaper, Clarín, one of the widely read newspapers in the Spanish speaking world and the official spokesperson of the company’s interests.
Until recently there was a saying: “There is no government that could survive three bad front-page stories in Clarín”. Today Cabinet Chief Juan Manuel Abal Medina employs a similar phrase: “There is no newspaper that could survive three popular governments,” referring to Cristina Fernández de Kirchner’s two terms following her late husband, Néstor Kirchner, who was president from 2003 to 2007.
But Clarín is not the only party in this dispute with consistently favorable coverage; the government supports through advertising what it calls “official” media. This is the case of the TV network C5N, owned by Cristóbal López, a businessman who became rich off the casino business in the province of Santa Cruz, the bastion of Néstor Kirchner, who governed the state from 1991 to 2003. The government also enjoys support from the newspapers Página/12 and Tiempo Argentino, and smaller (but rising) media conglomerates like Grupo Uno, owned by Daniel Vila and José Luis Manzano, a businessman close to Cristina Fernández de Kirchner and former president Carlos Menem’s minister of the interior.
In the last two weeks, most of the companies linked to the government presented plans to divest to the government’s newly-appointed media regulator. Nevertheless, the plans don’t seem to include opening the media market to new actors. They prefer to create new firms with different names, with close ties to the parent company. Grupo Clarín has not budged, arguing in a federal court that the media law is unconstitutional and that it is being unfairly singled out for “political reasons,” according to Clarín (16/07/11).
In spite of a strong exertion of the government´s will, the chance of seeing Grupo Clarín dismembered by the December 7 deadline – nicknamed in newspaper headlines and by Twitter users as 7D, -- has vanished. Instead, the situation seems to be headed to judicial deadlock that will keep lawyers very busy this Christmas.