Executive Has Firm Grip on Mexico's Top Broadcaster
By JULIA PRESTON
April 22 -- Not even his own father was sure
that Emilio Azcárraga Jean could run Grupo Televisa, the
world's biggest Spanish-language broadcast conglomerate that has
loomed large over Mexican life for half a century.
When his father,
Emilio Azcárraga Milmo, died in April 1997, he had not
selected his 29-year-old son to succeed him as chairman of the empire
but had instead handed that post to another young executive. What he
did bequeath to his only son was the presidency of a bloated and
stumbling enterprise, debts estimated at $1.3 billion and a tangled estate
that quickly generated a struggle among the heirs.
Now, just three
years later, the younger Mr. Azcárraga is the chairman,
president and undisputed leader of Televisa. He survived one internal
power showdown after another, refinanced his debts and consolidated
financial control of the $9 billion corporation. He retired nearly an entire
generation of management chosen by his father, including 46 vice
presidents, and revolutionized the operating culture by imposing cost
controls and laying off 6,000 of the company's 20,000 employees.
He also declared
political independence for the network's news shows,
which under his father had been unabashedly pro-government. That lent a
new openness to the campaigns leading up to presidential elections in
had a virtual monopoly on TV broadcasting in Mexico
until the early 1990's, has fought insurgent competition to rebuild its share
of the viewing audience to 80 percent from a low of 73 percent.
In a rare interview,
Mr. Azcárraga said he had decided to recreate
Televisa by running it as a "directed democracy" and by setting goals that
he would systematically meet.
"I needed to
measure for myself if I was the right one to be president of
this company," said Mr. Azcárraga, who carefully avoided directly
discussing his father. His approach was a radical departure from that of
the elder Mr. Azcárraga, known as the Tiger, who was both freewheeling
and fiercely autocratic. During the 25-year reign of his father, who had
inherited the company from his own father, Televisa depended largely on
the acuity of its leader's impulses.
"I didn't have
a strategy for gaining control," Mr. Azcárraga said, recalling
the uncertain days after his father's death when he owned only 10 percent
of Televicentro, the holding company that his father had controlled and
that, in turn, controls 26 percent of Televisa. "I had a strategy for
restoring the company."
And he was aware
of investors' doubts. "When I went to New York in
1997 to explain what we wanted to do," he added, "70 percent of them
didn't believe a word I said."
His lawyers had
recommended that he sell out. "But this company was
made by my family, and I have an important moral stake in it," Mr.
Azcárraga said. "Besides, it was easy for me to gamble. I had nothing to
lose. I was only 29."
To prevail, Mr. Azcárraga had to take on some Mexican business titans.
His father, just
weeks before he died, had designated Guillermo Cañedo
White to lead the board. Mr. Cañedo was a young media executive
whose father had been a close associate of the elder Mr. Azcárraga.
But Mr. Cañedo
soon tried to dominate Mr. Azcárraga, who turned for
help to Alejandro Burillo Azcárraga, a cousin with long experience in
Televisa. Within months, Mr. Cañedo was forced out.
very quickly that we were dealing with a complete
Azcárraga," said Enrique Krauze, a historian and publisher who sits on
the Televisa board. "When his father was alive, people called him Little
Emilio. But once they saw him in action, that stopped right away."
Then, in a second
round of succession strife, Mr. Azcárraga parted ways
early last year with the Alemán family. The family had been Televisa
shareholders for decades and its patriarch, Miguel Alemán Valdés, had
been president of Mexico in the 1940's. In the battle of wills between the
families, Mr. Azcárraga stood firm. In the end, the Alemáns bowed out
said the Alemáns even recommended a solid-gold
replacement. Last May, their piece of Televicentro plus some other
shares were snapped up by Carlos Slim Helú, the billionaire financier and
chairman of the telecommunications giant Teléfonos de Mexico. In all,
through his financial group, Sinca Inbursa, Mr. Slim bought 23.9 percent
of Televisa's holding company in a deal in which he agreed to vote
always with Mr. Azcárraga.
"We didn't have
to convince him," Mr. Azcárraga said. "He saw a good
company with people who had a good plan, and that's what Slim looks
at." Mr. Slim's bet paid off: before the recent turbulence, the trading price
of Televisa shares had more than doubled since he bought in.
who has been busy accumulating shares of his own, now
holds 51 percent of Televicentro. With the decision-making power he
gained over Mr. Slim's shares, he has control of almost 75 percent of the
The next, and
perhaps last, major succession contest is under way,
placing Mr. Azcárraga on the opposite side of the negotiating table from
Mr. Burillo, the cousin who came to his rescue in the perilous early days.
Mr. Burillo, another member of the traditional Televisa inner circle who
has said he did not feel comfortable taking a seat behind his younger
relative, left his post as president of international affairs in October.
Now Mr. Burillo,
who has remained on the Televisa board, wants to sell
his 25.1 percent stake in Televicentro, both sides in the negotiations
confirmed. Despite friction between the cousins, Mr. Azcárraga said,
their talks "are on good terms."
In a recent interview
in his chairman's office, the scion who once
hesitated to speak even in closed meetings displayed the unstudied
confidence that distinguished his grandfather and father, whose portraits
fill the wall behind his desk. He sat in shirtsleeves in an easy chair with
eight remote controls lined up before him, keeping one eye on a bank of
TV screens as he talked.
officials said that the most striking difference between
Mr. Azcárraga and his imperious father is that he listens and delegates.
"I like to hear
all kinds of opinions," he said. "We have a lot of meetings
now, we talk things out. We try to reach a consensus."
who is largely self-taught on financial matters, has
surrounded himself with an adept team that still has a family feel. Among
his closest advisers are Bernardo Gómez and José Antonio Bastón,
friends from his school days, and Alfonso de Angoitia, a vice president,
who was his lawyer through the succession wars.
The inner circle
also includes Gilberto Pérezalonso, an implacable cost
cutter, and Jaime Dávila, the programming executive, the only person in
the top rung to have survived from the elder Mr. Azcárraga's era.
also engineered a shake-up in programming, moving
away from a his father's system in which lifetime loyalty was required of
stars and defectors were ruthlessly ostracized. He has also tried to install
a more modern and politically open generation of news anchors.
"What is my editorial
line?" he said. "It's very simple -- to inform as much
as possible, as well as possible. The viewer has to decide on his thinking
For decades Televisa
news was dominated by one man: the nighttime
anchor Jacobo Zabludovsky, who was happy to place his show at the
service of Mexico's closed one-party system. Mr. Azcárraga retired him
from the nighttime broadcast and has forced other anchors to share their
decision-making with off-camera executive producers.
stars have chafed at having their personal power
reduced. Late last month, three of the network's most influential newsmen
quit in one week, including Mr. Zabludovsky, who was still the anchor of
specials, and his son Abraham, also an anchor.
"When I was 18,
I really didn't care if there was freedom of expression in
Mexico or not," Mr. Azcárraga said. "But in the last decade, since I have
been working here, I have seen incredible changes. The system changed.
It opened up to democracy."
added that he had never received the phone calls from the
Interior Ministry with "suggestions" for coverage that were routine in the
days of his father. Yet he has made it clear that he will not stray far from
the government's beaten path. His admiration for President Ernesto
Zedillo, a member of Mexico's ruling party -- known as the PRI -- was
journalist, Ricardo Rocha, made his mark with bold
documentary exposés that showed the complicity of the PRI in two
massacres of rural farmers. Last year, Televisa leaders banned the
showing of another exposé that was critical of the government. In May,
Mr. Rocha quietly resigned.
Prodded by Wall
Street analysts to increase growth, Mr. Azcárraga is
immersed in an array of projects. In Mexico, where advertising rates are
the cheapest in the hemisphere, he plans to double the Televisa price in
three years, expecting to double ad revenues by 2005.
To give the company
greater flexibility for new investments, he is
completing a complex tender offer on $970 million of Televisa's foreign
bonds, which carried heavy restrictions. Cablevisión S.A. de C.V., the
cable company Televisa owns jointly with Mr. Slim, is preparing to go
public in May, in part to raise capital to expand outside Mexico City.
demands from regulators concerned about Mr. Slim's
large telecommunications holdings, Mr. Slim will sell down his stake in
the cable venture.
is also ready to begin esmas.com, Televisa's Internet
portal. The name means "it's more," but analysts had begun to refer to it
as "it's late." Mr. Azcárraga said he thought that Televisa would
eventually make an Internet alliance, but for now it would go it alone.
is working to bury the bad old Televisa without rejecting
his father -- a delicate task.
"He is recreating
the company by erasing his father's shadow," said
Claudia Fernández, a Mexican writer who just published "El Tigre," a
biography of the elder Mr. Azcárraga. "But he has done it by gaining
investors' respect for what he can do by himself."