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Brazil takes first step to foreign investment

RIO DE JANEIRO — Politicos overwhelmingly approved a critical first step towards opening Brazil’s media sector to foreign investors Dec. 11.

The lower house of Congress voted 406 to 23 in favor of a constitutional amendment that will allow up to 30% foreign investment in TV and radio broadcasters and publishing companies. Ownership is currently restricted to Brazilian nationals.

Analysts believe the amendment, which must still pass three more rounds of voting, will receive final approval by March.

Supporters foresee a huge infusion of foreign capital. Brazil’s six private, terrestrial TV networks carry huge debt and have been actively lobbying for the amendment.

Cash inflow

“I believe we will see heavy foreign investments in the television broadcast market, due its size and importance,” says Daniel Herz, director of the National Federation of Journalists.

Last year, ad revenues for the six private terrestrial networks were $3.2 billion.

Yet some analysts maintain that the 30% cap and the slowdown of the U.S. economy may reduce foreigners’ appetite for Brazilian media companies.

Still, hopeful broadcasters have reportedly started negotiations with potential investors. No one is confirming talks, though Rede TV, the country’s fifth net, is said to be the most advanced.

TV Globo, which has about half of the nets’ audience share and is part of the media group controlled by the Marinho family, is the most attractive, analysts say.

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