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NBC buys Telemundo

NBC recently purchased Telemundo Communications Group Inc. for $1.98 billion in equity from Sony Pictures Entertainment, Liberty Media and a consortium of financial investors.

With the acquisition of Telemundo's broadcast and cable properties, NBC becomes the only major broadcast network with a business fully devoted to developing and airing programming specifically created for the Spanish-speaking market. Hispanics are the nation's fastest-growing demographic and are expected soon to be the largest minority group, representing one of the most attractive opportunities for dynamic growth in the television marketplace. The 24-hour Telemundo network currently serves 86 markets, reaching 88 percent of Hispanic TV households in the United States.

Assets being acquired by NBC from Telemundo include the national Telemundo network and full-power owned-and-operated stations in top Hispanic U.S. DMAs, including New York, Miami/Fort Lauderdale, Houston, Chicago, Dallas/Fort Worth, San Francisco/San Jose, San Antonio and Denver, as well as two Los Angeles stations (KWHY-TV & KVEA-TV). Other assets NBC acquired include the No. 1 station in Puerto Rico, 40 broadcast affiliates and two growing cable networks, Mun2 and Telemundo Internacional.

The combination of NBC's and Telemundo's resources creates strategic opportunities across all divisions, including sales and promotion, station operations, news, entertainment programming and sports. Possibilities include the addition of Spanish-language versions of NBC shows on Telemundo, including late night and reality programs and the Olympics. National sales efforts can also be integrated, network cross-promotion can be initiated and NBC cable expertise can be leveraged to grow Telemundo's national distribution.

NBC's acquisition of Telemundo won't come without its share of problems. For starters, it puts NBC over the FCC's thirty-five percent ownership cap and may hamper NBC's ability to buy the rest of Paxson Communications Corp., unless the ownership rules are changed, which may be in the works. NBC currently owns about one-third of Paxson's shares.

The acquisition of Telemundo may also quell industrywide rumors about GE possibly selling NBC — at least for a while. GE's new CEO Jeffrey Immelt has indicated that there are no plans to unload NBC, but his comments have done little to dissuade industry observers from speculating about a possible sale.

Telemundo's Los Angeles facility recently was expanded to include both KVEA-TV Channel 54 and KWHY-TV Channel 22. With less than five miles between the new Telemundo facilities and the NBC Burbank, CA, plant where KNBC-TV Channel 4 is located, one can only speculate about any additional consolidation.