Azteca vs. Canal 40. (New Business).

The federal government stepped in and took control of Canal 40, following bitter and fruitless negotiations between the media companies Television Azteca and CNI, which runs Canal 40. Many commentators said the conflict and ensuing shutdown reflected the punishing power of big business. "The representatives of the two companies opted to continue airing their differences through legal channels and had not moved toward conciliation," said Interior Secretary Santiago Creel in remarks that were published on the front page of nearly all Mexico City's newspapers in mid-January.

The government shuttered Canal 40's offices and debilitated its broadcasting signal.

The debate raged for weeks in the media, as TV Azteca was portrayed in various degrees as a bully or short-changed lender, and Canal 40 as a channel struggling to survive in a two-station market and a money-losing, ineffectual enterprise.

Azteca and rival Grupo Televisa control 90% of the television market. The problem stemmed from a US$25 million deal in which the financially strapped Canal 40 accepted a payment from Azteca in exchange for advertising space and a share of the small station's revenue. When Canal 40 backed out of the deal, Azteca charged breach of contract and took over the channel's transmission tower and signal.

"It was like if you bought a house and you let some guy live in it for a while and he wouldn't leave," Azteca executive Tim Parsa told BUSINESS MEXICO.