NBC Universal parent company GE will begin building a studio in Mexico this year as it pushes forward with expansion plans south of the border after being shut out of its bid to buy Mexico's bankrupt Canal 40.
GE had been eyeing the small UHF station in Mexico City as a way of getting content from NBC U's Spanish-language net Telemundo on air.
It wants its own studio "to capture the flavor of Mexican content, which is an important part of our appeal to the Hispanic market in the United States," said Rafael Diaz-Granados, GE legal director for Latin America, who would not give further details about the studio.
Telemundo buys telenovelas from Mexican production house Argos, but wants tighter control of productions. It already operates studios in Miami and Columbia and now boasts that it's outpaced Azteca as the second-largest producer of Spanish language content in the world behind Mexican media giant Televisa. Latter's telenovelas fuel Univision's primetime dominance of the U.S. Hispanic market.
NBC partnered with TV Azteca, the country's No. 2 net, in the late 1990s, but the deal ended in a lawsuit. Nets faced off again last summer after GE tried to get its foot into Canal 40 by offering to pay off workers' unpaid wages.
Canal 40 went back on air Wednesday evening under the control of TV Azteca after a nine-month shutdown. It will broadcast mostly news.
TV Azteca, which has been fighting a legal battle for Canal 40 since 2000, partnered with one of the channel's minority shareholders to gain control.
Azteca's bid was indirectly aided by a government probe of GE's loan offer to Canal 40's owner. Mexican law prevents foreigners from owning broadcast assets and the government intially said the loan could have breached Mexican statutes.
While GE said the loan carried no equity stake, striking workers refused to take GE money while the probe was ongoing. The government said last week the probe had been closed after U.S. authorities refused to provide solicited information.
Azteca's legal battle continues with Canal 40's majority owner Javier Moreno Valle, who has been indicted on tax fraud charges in Mexico and has remained under watch by U.S. authorities for possible extradition since being spotted in America in November.
But recent legal proceedings have given Azteca the upper hand for now.
Diaz-Granados said GE is still looking for a Mexican partner with whom it could legally launch a network in Mexico.
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