In the midst of a bitter trial in Los Angeles, the two sides did what seemed the impossible: They settled, heading off a verdict that was not likely to make either side happy.

The agreement, announced yesterday between Univision and Televisa, increases the amount of royalties the Mexican company production company receives for the Spanish-language programs it provides to Univision, keeping intact a licensing agreement that's set to run through 2017.

Terms of the settlement were not disclosed, but apparently it provides for a sizable increase in royalty payments to Televisa. One report has it valued at $600 million.

The settlement came as Televisa CEO Emilio Azcarraga Jean was set to testify.

On the face of it, the suit was over royalties Televisa said Univision had failed to pay, but the real aim of the suit was to break the licensing agreement, setting Televisa free to sell its programming to the highest bidder on a show-by-show basis, including Univision rivals like Telemundo, the distant No. 2 Spanish-language network owned by NBC.

Televisa had chafed for years under the agreement, which goes back to 1992, believing it was being paid far too little in royalties.

A court ruling setting aside that contract would have been potentially devastating for Univision, which dominates Spanish-language TV as the fifth-largest broadcaster in the U.S., largely on the popularity of the primetime programming supplied by Televisa, most notably its telenovelas, or soap operas. Those shows first air in Mexico, so they have a built-in following by the time they air in the U.S.

Univision would have been reduced to a third-rate network left to scramble for its entertainment programming, with huge implications for marketers seeking to reach Hispanic households.

But even if Univision had won the case, the relationship between the two would be irreparably damaged, more so than it already was.

At one point, in 2007, Televisa had sought unsuccessfully to partner with U.S.-based companies in a bid to acquire Univision, losing out to a private equity consortium led by producer Haim Saban, which agreed to pay $12 billion.

Observers of the dispute saw some sort of settlement as inevitable, with Univision agreeing to pay more in royalties, and they were surprised that the case actually made it to trial without some sort of resolution. The suit was filed four years ago.