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League of Champions Is Turner Turf

Esporte-interativo

Source: TELA VIVA News

Topic: Sale of Esporte Interativo to Turner defies broadcasting legislation

São Paulo — The purchase of the Esporte Interativo channel by Turner could have important implications for the broadcasting industry and presents a regulatory challenge for the Ministry of Communication.

This, because Esporte Interativo is widely distributed by open broadcast and the satellite-based C band, also open.

The problem is that under the Constitution, foreign capital is limited to 30% of broadcasting companies. The Constitution also demands that the management of content be the responsibility of native or naturalized Brazilians with 10 years of residence.

The Esporte Interativo feed is generated by TV Eldorado (part of the Estado de S. Paulo) in Santa Inês, Maranhão, and retransmitted in 22 cities, including the city of São Paulo. The leasehold on air time is 100%. In other words, 100% of content on the open channel is provided by Esporte Interativo.

According to Turner, there is no legal impediment to the deal, given that Esporte Interativo does not own or share in broadcasting concessions.

The company told this publication that “EI is a programming company that produces and distributes sports-related content on a variety of platforms. EI holds no broadcast license, in which case restrictions on foreign capital do not apply.”

As this publication discovered, EI also has an option to buy the generator. It is not known whether this option will be retained by Turner. It is also speculated that EI could cease broadcasting on an open channel, in order to compete more agressively for reproduction rights, given that as an open channel, it faces competition with the Globo network.

Another issue to be confronted is satellite transmission on the C band, which feeds 20 million paraboic antennae. The C band is a kind of regulatory limbo, in that there is no regulation for satellite broadcasting, though these channels are open and reach every part of Brazil.

If Esporte Interativo chooses to remain open and Turner funds the dispute for sporting events, as happened recently with the Champions League, it could defy the hegemony of the Globo group in this area, and would certainly face legal challenges.

Experts in the regulation of broadcasting explain that the situation is similar to that of religious groups and independent programmers that lease air time on the open channels of a second party.

In this case, however, 100% of the air time is leased, a situation not seen since MTV Brasil had Viacom as a 50% partner, alongside the Abril group. When Viacom assumed 100% of the MTV channel, MTV stopped being broadcast on open TV.

July 29, 2013.

According to Article 222 of the Federal Constitution, “At least 70% of the total capital and voting shares of journalism companies and broadcasters producing sounds and images, directly or indirectly shall be held by native or Brazilians naturalized after 10 years, who will be obliged to manage the companies and establish the content of the programming.”

The original announcement:

A Esporte Interativo has been acquired by Turner Broadcasting System Latin America. In June 2013, Turner acquired a share in Esporte Interativo under the terms of which it will hold 100% of the shares in the company. Edgar Diniz, CEO of Esporte Interativo, will remain in office.

“We are happy to closed this strategic acquisition and are proud to have Esporte Interativo as part of our portfolio,” said Juan Carlos Urdaneta, CEO of Turner América Latina. “Brazil is a priority market, both for Turner and for Time-Warner, and the company is totally committed to the growth of this local market,” the executive added.

Esporte Interativo is the channel that purchased the TV rights to the League of Champions for the next three years.