EspañolFew things better illustrate the current mindset of Puerto Rico’s ruling class and influence peddlers than the recent closing of Univision Noticias. On Friday, October 17, Univision announced it was closing its entire news operation at Channel 11, and laying off roughly 100 employees, including anchors, producers, photographers, and other staff.
At one point, Teleonce, as it was previously known, was the top news broadcast on the island. Yet, in recent years, it had been struggling, according to staff.
News of the decision to shut down went viral on the island. There were calls for boycotts on all Univision products.
It was denounced as a “Mexican insult” to Puerto Rican talent, and a “racist” decision. Local media covered the action as if it were the biggest news story of the year. The journalists’ union issued statements about it, and even Governor Alejandro Garcia Padilla met personally with some of the fired employees and promised them direct government assistance.
Curiously, in just the past few weeks, pink slips have also gone out at Eli Lilly, CitiFinancial, Abott in Barceloneta, ScotiaBank, and Doral, which recently won a case against the Puerto Rico Treasury. Local media did not cover those terminations with the same intensity as they did the Univision layoffs. The governor, to the best of my knowledge, has no plans to meet with those employees and make them promises of “direct government assistance.”
While Puerto Rican media was focused on the disemployment of their fellow journalists, they missed the biggest story of the week: Puerto Rico is again going to the bond market to raise another US$2 billion in financing. They also mostly seemed to ignore the reports that the Government Development Bank for Puerto Rico is again bankrupt and nearly insolvent.
The missing pieces to this puzzle are in the numbers.
Early this year, the island went to the bond market and sold $3 billion in bonds. The Puerto Rican government said its “gap funding” and budget cuts would allow the island to continue its operations until the economy turned around. No other bond sales would be needed, they said. Then came the credit downgrades of the island’s debt to junk status.
Then quietly, in late spring and early summer, there was another bond sale for half a billion dollars. In mid-summer there were isolated reports that the island was issuing another $1.2 billion in debt, and now there are reports of another bond sale for about $2.5 billion. That’s $7.2 billion in new bond sales in one year for an island that is already languishing beneath a $70 billion debt.
It becomes even more ominous when you realize the island’s total local budget is less than $10 billion a year, and that there have been budget cuts supposedly balancing the budget — except for a $500 million deficit. Or was it $300 million? Maybe it was $700 million. Tax Revenues are up, but they are down, expanding, but short of expectations.
Has the Puerto Rico government broken the law and/or Securities and Exchange Commission (SEC) regulations by telling Wall Street investors that they would not need to borrow more after the initial $3 billion? Did they file false financial reports to justify that initial bond sale, considering their steady stream of borrowing?
One of the reasons Puerto Rico was downgraded was because of questions over whether or not it could even pay its existing debt. Now there are reports that Puerto Rico bonds are paying more than Greece.
What is the exact size of Puerto Rico’s deficit? How much of the budget is going toward paying interest on that debt? Is the island borrowing money just to pay that interest?
As if things weren’t already complicated with new tax codes, including taxes on sales between businesses, the island introduced a new red light and camera ticketing system, without even bothering to consult the current police chief. Can you say “revenue generator?”
But that isn’t important. What’s important is that Univision attacked and insulted the people of Puerto Rico by making a business decision about how to run its business. It couldn’t be that the Channel 11 newscast was a terrible product, or that it was often inaccurate, partisan, at times downright irresponsible, and above all, losing money.
It couldn’t be that these reporters were suffering the same fate as hundreds of thousands of their fellow Puerto Ricans. I thought for a moment that since this happened local media might finally get on the common sense bandwagon and start telling it like it is: anti-business laws mean less business, less jobs, and a worse economy.
The policies of the government, under the leadership of both major parties, has led directly to the closing of more than 12,000 businesses, according to Caribbean Business, which also had to file chapter 11 bankruptcy in the last month.
Other news outlets have faced cutbacks, and more are sure to follow. As traditional media starts to go dark, maybe newer media sources like the PanAm Post will be able to fill the void. Then again, maybe we have already said all there is to say about the island of disenchantment.