TV pact crosses border

Telemundo strikes deal with Televisa

By MICHAEL O'BOYLE

NBC Universal's U.S. Hispanic web Telemundo has given up on its immediate ambitions to bow a web in Mexico -- and has linked up with Mexican media giant Televisa, which had lobbied hard to keep it out of the market.

Telemundo said Monday it has struck a 10-year programming and licensing agreement with Televisa to distribute its Spanish-language content south of the border.

Televisa will air Telemundo content on its Channel 9 and via a paybox that will launch on Televisa-owned cable and satellite platforms. Financial terms of the deal, which will include digital distribution at a later date, were not disclosed.

"This is an important agreement between two global leaders in Spanish-language media," NBC U prexy and CEO Jeff Zucker said in a statement.

Telemundo cut the deal following four years of repeated failed efforts to clinch a broadcasting license in Mexico.

Both Televisa and its smaller rival TV Azteca used their hefty political influence as Mexico's only two national broadcasters to keep Telemundo out of the market.

After Mexico's new administration said it would be unlikely to grant a U.S. net any privileges as long as limits remained on Mexican ownership of U.S. media assets, this compromise deal with Televisa looks like the best that Telemundo prexy Don Browne can expect.

Browne has long sought a foothold south of the border, both to nab a chunk of local ad revenues and to increase Telemundo's brand recognition among Mexicans, who make up more than two-thirds of the U.S. Hispanic audience.

Mexican-Americans' familiarity with Televisa-made telenovelas aired on U.S. network Univision is considered a big part of that net's dominance of the U.S. Hispanic aud.

"People have been raised for generations on Televisa," said Julio Rumbaut, a Miami-based TV consultant.

Rumbaut was skeptical Telemundo would see much crossover effect for its U.S. ratings anytime soon: "This is a much more Televisa-centric deal."

From Televisa's point of view, the Telemundo programming accord allows it to contain what could have become a major rival in Mexico.

"We look forward to building a solid relationship with NBC Universal and Telemundo, and (we) are excited about the opportunities our companies can realize in Mexico working together," said Televisa exec VP Alfonso de Angoitia.

The new relationship also may lay the groundwork for a shakeup of the U.S. Hispanic TV market.

Televisa wants to break its long-term content licensing agreement with Univision. The matter is due to go before a Los Angeles court in late April.

At stake is Univison's lock on Televisa's primetime soaps. Should Televisa prevail in the suit, it would be free to offer its content to Telemundo -- or strike a more lucrative deal with Univision.