Leading US Hispanic broadcaster Univision Communications has bought USA Broadcasting, the television station group of USA Networks, for $1.1 billion in cash. The Spanish-language network has also assumed USA Broadcasting's liability of $100 million, according to USA Networks spokesperson, Adrienne Becker. USA Networks had acquired USA Broadcasting's 13 full power stations for $250 million when it bought Silver King Communications in 1995.
According to Barry Diller, Chairman and CEO of USA Networks, two factors had prompted their decision to sell USA Broadcasting: "One, a realistic assessment of our inability to either go it alone or join in an equal partnership with a stronger broadcast group to build the stations into competitive forces in their markets and two, the desire to focus our time, effort and investments in the Entertainment sector of our Company, on cable program services and the production and distribution of television and theatrical motion pictures."
USA Networks had been seeking a buyer for the loss making USA Broadcasting since late last year.
"In hindsight, we were probably overly ambitious in attempting to develop these television stations locally," Diller added.
"As the U.S. Hispanic market continues to expand, we believe there will be tremendous demand for Spanish-language entertainment," said A. Jerrold Perenchio, Chairman and Chief Executive Officer of Univision. "The stations that we are purchasing from USA Broadcasting are highly complementary to our existing broadcast assets, and we will be able to significantly leverage the combined assets in order to realize greater value and provide our viewer base with additional Spanish-language content."
The acquisition of USA Network's 13 fully owned stations as well as its minority interests in four additional full power stations will provide Univision with duopolies in seven of the top eight U.S. Hispanic markets. Univision already holds a more than an 80% share of the market. Competitors Telemundo and the upcoming Azteca America, partly owned by Mexico's second largest broadcaster TV Azteca, will have to contend with an even stronger rival.