Universal Pictures and advertising, PR and talent management firm The Arenas Group are dissolving their partnership in Arenas Entertainment, the US Latino-targeted film label launched in November 2001.

"We are shifting to a non exclusive arrangement with Arenas," said Marc Shmuger, vice chairman of Universal Pictures. Rather than using one supplier (Arenas), Universal is moving to a multi-supplier arrangement "in recognition of the diversity, complexity and breadth of the opportunities provided by the Latino market," said Shmuger.

A third partner in Arenas Entertainment, Spanish venture capital group Marco Polo Investments will remain as an equity investor, according to Arenas Entertainment CEO Santiago Pozo.

Ironically, the change comes despite success with Arenas' first acquisition, Empire, which earned nearly $20m in the US. Starring John Leguizamo, the gritty urban drama went wide on nearly 900 screens and posted the second best opening for a Latino film since Warner Bros' Selena, starring Jennifer Lopez.

Arena's second project, Imagining Argentina, a co-production with Myriad Pictures, enters into competition in Venice next month. Universal arthouse label Focus Features will distribute the political thriller starring Antonio Banderas and Emma Thompson in the US.

The split with Universal will free The Arenas Group to pursue other opportunities. Sources say it will most likely attempt to form its own independent distribution venture aimed at the Hispanic market.

Arenas Entertainment recently acquired Colombian comedy Como El Gato Y El Raton which had its US premiere at the Los Angeles Latino International Film Festival last month. It also entered a three year agreement with popular Mexican band Los Tigres Del Norte to co produce feature films starring or showcasing the group.

In other deals, Arenas optioned the film rights to the autobiography of wildly popular US Hispanic syndicated disc jockey 'El Cucuy' and to bestselling Chicano novel, Macho! by Victor Villasenor. Whether Universal will participate in these projects is uncertain.