General Electric's NBC television unit on Thursday agreed to acquire Spanish-language broadcaster Telemundo for $1.98 billion in a deal that would give the venerable network entry to the nation's youngest and fastest-growing market.
"This is the most dynamic television market in the U.S.--the Hispanic television market," said Bob Wright, chairman of NBC and a GE vice chairman. "All the things that you look for in a television business, at a time when things are bleaker than they have been for quite a while, are really here in Telemundo."
The marriage, Wright said, would benefit NBC as much as Telemundo, which lags far behind Los Angeles-based Univision, the industry giant that commands 80% of the Spanish-speaking U.S. television market.
NBC would pay half of the $1.98 billion in cash and half in GE stock. NBC also would assume Telemundo's debt, estimated to be about $700 million.
The union would rewrite play-books for both networks.
"This will change things," NBC President Andrew Lack said.
The deal, which is expected to close in mid-2002, would give NBC a presence in nearly 9 million Spanish-speaking homes and allow the networks to share sports, news and entertainment programming as well as writers and advertising sales staffs.
Hialeah, Fla.-based Telemundo and NBC hope their partnership will help attract the swelling population of bilingual Latinos who divide their viewing time between programs in Spanish and English.
For Telemundo and Latinos throughout the country, the deal underscores an increase in stature and credibility in the business world. NBC's embrace of Telemundo says Spanish-speaking television is a force to be reckoned with.
"This is the most significant day in the history of Spanish-language television," said Jim McNamara, chief executive of the network. "This is the day that Spanish-language television came of age."
Carlos Santiago, co-chairman of Santiago & Valdes Solutions, a San Francisco marketing firm specializing in Latino media, said the NBC-Telemundo deal reaffirms the emerging economic power of Latinos, who now make up nearly 13% of the U.S. population.
"This marks a fundamental change in how corporate America is viewing the Spanish-speaking market," Santiago said. "The big picture is: If you want to be a leader in the media industry, you have to be positioned with key Hispanics, especially Spanish-speaking media outlets, instead of just making some changes in programming and content."
