Spanish-lingo leap

TV Azteca, partner plan third U.S. Hispanic web

MEXICO CITY — TV Azteca has teamed with an American partner to create a third Spanish-lingo broadcast network in the United States.

Azteca chief financial officer Adrian Steckel declined to identify the partner, but said a formal agreement exists. They are jointly seeking to buy stations in Hispanic markets to build a net to compete with Univision and Telemundo.

“We have always said that market was too big not to participate in some fashion,” Steckel told Daily Variety. “We will do something in 1998.”

Steckel did acknowledge Azteca’s long-rumored interest in a stake in Telemundo. “All I can say is we didn’t win,” he said of the network which was purchased in November by an investor group led by Sony Pictures Entertainment and Liberty Media Corp.

Azteca topper Ricardo Salinas Pliego told news agency Reuters in an interview released Monday that FCC restrictions on foreign ownership scuttled a deal. “This hurt our ability to negotiate with Telemundo a lot,” Reuters quoted him as saying.

In its new venture, Azteca will also be limited to a 25% stake in any broadcast stations, as dictated by U.S. law.

Azteca aims to buy bigger stations in California, Chicago and the southwest, and build out with affiliates from there, Steckel said. “We will concentrate on the Hispanic markets in the United States that are Mexican or of Mexican descent,” he said.

Although Spanish-lingo TV is dominated by Univision, in which Azteca rival Televisa owns a 20% stake, Steckel maintains there is room for “two players, maybe three.”

Univision has wooed as much as 90% of the Hispanic viewers with its Televisa-made novelas, while Telemundo does not compete in the genre, Steckel said. “We think the key is high-quality Mexican product — we have a proven formula that works.”

“We produce for two networks in Mexico, so putting together a lineup for one is not so hard,” Steckel said.

A U.S. network would provide a huge opportunity for export sales of original programming. Such sales accounted for a mere $5 million in revenue in 1997. The U.S. foray will follow Azteca’s aggressive international expansion in Latin America. Last year, Azteca acquired a controlling interest in three foreign stations, in Guatemala, El Salvador and Chile, for a total of about $17 million.

This year, it has earmarked between $80 million and $100 million for more purchases, with three contracts close to signing.

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