Grupo Clarin SA (GCLA) won a last-minute court ruling to postpone implementation of an antitrust law that would’ve broken up Argentina’s largest media group.
A Buenos Aires-based court suspended today’s deadline for Clarin to present a plan to sell assets without setting a new date until a separate court determines the constitutionality of the law, according to the ruling yesterday.
The decision is a reversal for President Cristina Fernandez de Kirchner, who orchestrated a media campaign and public rally to celebrate the deadline set by the Supreme Court back in May for Clarin to present its divestment plan. The government intends to appeal the ruling, and is vowing to continue its four-year showdown with the media group, who Fernandez regularly taunts in public and considers a “monopoly.”
“It can’t be possible that democracy is subjugated to corporations,” Gustavo Lopez, a presidential under-secretary, said in an interview with CN23 television network yesterday. “Sooner or later we will win.”
The government today asked the Supreme Court to revoke yesterday’s ruling, according to the presidential website.
Clarin’s shares surged 7.9 percent to 8.9 pesos as of 11:06 a.m in Buenos Aires, after jumping 10 percent jump yesterday, the biggest gain since Oct. 28, 2010, on speculation the group would obtain a favorable ruling.
Fernandez, 59, and her government have clashed frequently with Clarin and its owners since 2008, when the government accused the newspaper of biased coverage during a four-month protest by farmers opposing plans to increase export taxes.
Targeting the media group, she pushed through Congress in 2009 an overhaul of the country’s media landscape that set limits on media ownership that would break up what the government calls monopolies.
On Oct. 24, Argentine media regulator Martin Sabbatella threatened to auction some of Clarin’s assets that exceed limits stipulated in the media law if the group failed to present a divestment plan by today.
To comply with new limits, Clarin’s cable operator Cablevision SA, which has 168 licenses throughout the country, would have to reduce that number to a maximum of 24 while paring its market share to 35 percent from 47 percent, according to the company.
Clarin also owns 10 radio stations, four broadcast TV channels, 240 cable TV operators and Internet providers. The company posted third-quarter revenue of 2.9 billion pesos ($600 million), a 23 percent increase from a year earlier.
On Dec. 5, Sabbatella said that hedge fund Fintech Advisory Inc., which owns 40 percent of Cablevision, submitted a letter to the regulator expressing its willingness to divest in accordance with the law. Fintech Managing Partner David Martinez didn’t reply to an e-mail and a telephone call seeking comment.
The long-running feud had been building toward a climax today.
During the airing of the state-sponsored “Soccer for Everyone” sports program on Sept. 22, the government broadcast a four-minute video saying some Clarin assets will be auctioned starting Dec. 7. The clip referred to the date as “7D for diversity and democracy.”
Clarin responded with its own video before the latest ruling saying the injunction may be extended, and that the courts have another year to rule on the legislation. The Buenos Aires-based company said in an e-mailed statement late yesterday that it will continue to respect the constitution, law and court rulings.
The government had organized a Dec. 9 concert at the Plaza de Mayo square in front of the presidential palace to celebrate the media bill.
“The government thinks that with this new bill it will be able to control news and information released to the public,” opposition lawmaker Patricia Bullrich, who voted against the bill in 2009, said in a telephone interview in Buenos Aires. “Those lawmakers who supported the proposal now must regret this because they now see it has become a guillotine for freedom of speech.”
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