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An End To The Telenovela Wars?

Source: televisa.com

Finally, a settlement between Grupo Televisa , the Mexican media conglomerate and Univision, the biggest Spanish language TV company in the U.S.

It's been, a long, pricey road: years of conflict, a four year legal battle culminating in several weeks of court testimony. Televisa charged breach of contract, accusing Univision of withholding about $120 million in royalties, due largely to unsold commercial time on Univision subsidiaries. Univision said it had paid Televisa more than $1 billion in royalties since 1991 and that it stood to pay out another $2 billion before the existing contract ended.

The two sides have come to an agreement under which Televisa will continue supplying Univision exclusively with its telenovelas through 2017, and Univision's right to broadcast Mexican soccer matches will be extended for another year. In sum, Televisa's getting compensated, and Univision will get to maintain its dominance of the U.S. Latino market. Univision has agreed to pay $25 million in disputed royalties, increase the license fees paid to Televisa, and provide at least $65 million annually in free advertising over the next nine years.

This deal is crucial for privately-held Univision which is carrying $10 billion in debt as part of the leveraged buyout of the company two years ago. Facing a decline in advertising (along with the rest of the TV industry) it needs this revenue to pay off upcoming debt payments. The deal was finally struck in 11th hour negotiations, following an all-night negotiating session between Univision Chairman Haim Saban and Televisa EVP Alfonso de Angoitia, just hours before Televisa's Chairman was scheduled to take the stand to end his company's relationship with Univision.

But the companies haven't figured out everything yet: One lingering issue is whether Univision has the rights to broadcast Televisa's programming online.

That conflict will come to trial in March.

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.