MEXICO CITY — International crises are slowing the Mexican economy, prompting TV Azteca to put international expansion plans on hold and slash salaries and costs.
Under the so-called “Action Plan,” Azteca will cut senior management salaries — including that of topper Ricardo Salinas Pliego — by 10%.
Sales, administrative and other expenses will be slashed by 20%, the number-two broadcaster announced on Tuesday. Those cuts will not affect 1998 programming or production goals, Salinas Pliego said.
International expansion plans have been put on hold for the immediate future, he said, although TV Azteca continues to evaluate acquisition or investment opportunities throughout Latin America and the United States.
Azteca has stated its intention to acquire broadcast media properties throughout the Spanish-speaking Americas, with the exception of Argentina, and of plans to create a third Spanish-lingo net in the United States to compete against Univision and Telemundo.
The action plan aims to help the company build up cash reserves. Once the economic outlook is clearer, Azteca may then buy back shares, purchase its public bonds or scoop up distressed assets over the next 12 months.
Azteca’s stock has been hammered this year. It recently hit a 52-week low of $4.25 on the New York Stock Exchange, down 80% from its high. In a strong day for Mexican stocks Tuesday, Azteca rose 16.4% on Wall Street to close at $5.31.
In a separate statement, Azteca announced it recently signed a 10-year advertising contract with Unefon, Salinas Pliego’s wireless telco company, worth $200 million.
International market volatility has also forced Salinas Pliego to cancel plans to create and take public a holding company that would have formally united his and his family’s interests in Azteca, Unefon, retailer Elektra and beeper co Biper.