HC2 Network Inc. Acquires Azteca America

What: HC2 Holdings, Inc. subsidiary HC2 Network Inc. has acquired Spanish-language broadcast network Azteca America. The deal includes licensing agreement with TV Azteca for Spanish-Language TV programming; Acquisition of Television Stations from Northstar Media will expand HC2’s Broadcasting Network to 113 operating stations in over 80 U.S. markets.
Why it matters: Azteca America's offering may be better  monetized as part of a larger U.S. company. The transaction reflects the de facto exit of the second largest Mexican broadcaster of direct ownership in the U.S. broadcasting business.

HC2 Holdings, Inc., a diversified holding company, announced that its subsidiary, HC2 Network Inc., has acquired Azteca America, a Spanish-language broadcast network, from affiliates of TV Azteca, S.A.B. de C.V., one of the two largest producers of Spanish-language television programming in the world. In addition, HC2 Network has signed a definitive acquisition agreement with Northstar Media, LLC, a licensee of numerous broadcast television licenses in the United States.

"We are very excited about the transactions we announced this afternoon as they build upon our Broadcast strategy of acquiring broadcast assets across the United States to bring valuable content to more viewers over-the-air.  For example, the TV Azteca licensing agreement will enable our larger broadcast network, which includes our prior acquisitions of DTV America, Mako Communications, Three Angels Broadcasting, etc., as well as the Northstar stations (if approved by the FCC), to bring Spanish-language programming to even more of a large,  growing  and underserved market in the Spanish Speaking population in the U.S.  Unfortunately, the purchase consideration was not disclosed,"Andrew G. Backman, Managing Director Investor Relations & Public Relations at HC2 Holdings, Inc told Portada.

Under the agreement with Azteca, which has been already closed, HC2 Network acquired Azteca America, a Spanish-language broadcast network providing original content to the Hispanic audience in the United States. Under the agreement with Northstar, HC2 Network will acquire Northstar’s broadcast television stations, which carry Azteca America programming.

The Azteca transaction extends to the acquisition of professional staff across the U.S. involved in programming, marketing, advertising sales, finance and operations. The Northstar transaction, which is subject to approval by the Federal Communications Commission (“FCC”), as well as other customary closing conditions, would result in HC2 Network acquiring 19 television stations, including two full-power stations, eight Class A stations and eight low power television (“LPTV”) stations, along with a channel share agreement for the full-power license of KEMO-TV in San Francisco.

In combination with HC2’s previously announced acquisitions of a controlling equity interest in DTV America Corporation, which currently carries Azteca video programming in 10 markets, and of the broadcasting assets of Mako Communications, LLC and its affiliates, Three Angels Broadcasting Network, Inc., and other station licensees, the acquisition of the 19 Northstar television stations would expand HC2’s broadcasting network to 113 operating stations, including three full-power stations (inclusive of the channel-share agreement for KEMO-TV in San Francisco), 27 Class A stations and 83 LPTV stations, in over 80 markets across the United States. In addition, the acquisitions increase HC2’s construction permits to 475, allowing for further buildout of coverage across the United States.

The Azteca transaction also includes multi-year programming and services agreement that provides HC2 with access to TV Azteca’s current programming and library in Mexico, including top entertainment shows, talk shows, reality programs, network and local news, as well as telenovelas and other scripted series.

With 41 million native Spanish speakers in addition to 11.6 million who are bilingual, the United States now has more Spanish speakers than Spain and is second only to Mexico.

“The acquisitions of Azteca America and the Northstar stations will substantially expand and accelerate our investment in broadcasting,” said Philip Falcone, HC2’s Chairman, President and Chief Executive Officer. “Throughout 2017, we have strategically acquired broadcast assets across the country. Our vision is to capitalize on the opportunities to bring valuable content to more viewers over-the-air and position the Company for the changing media landscape. Our licensing agreement with TV Azteca will enable our larger broadcast network to bring compelling, Spanish-language programming to even more of the large, growing and underserved Spanish-speaking population in the U.S. At the same time, the combination of our network assets will generate opportunities for cost synergies through the rationalization of duplicative operations.”

“Today’s announcement marks an exciting and transformative milestone in Azteca America’s history,” said Manuel Abud, President and CEO, Azteca America. “We believe HC2 Network’s long-term investment and resources better position us, on a greater scale, to be an industry leader delivering best-in-class programming, production value and marketing solutions to our audiences and partners alike. Our shared business strategies and industry expertise makes this a perfect alliance to meet the ever-changing demands of the marketplace and further solidify Azteca America as an industry leader in premium Spanish-language content.”

“This alliance unlocks new opportunities for TV Azteca to expand our distribution arm in the United States and provide our world-class programming to new audiences,” said Benjamin Salinas, Chief Executive Officer, TV Azteca. “We look forward to forging future content collaborations with HC2 and Azteca America.”

The Latino population in the United States reached nearly 58 million in 2016 and has been the principal driver of U.S. demographic growth, accounting for half of national population growth since 2000.1 With 41 million native Spanish speakers in addition to 11.6 million who are bilingual, the United States now has more Spanish speakers than Spain and is second only to Mexico. The U.S. Census Office estimates that the U.S. will have 138 million Spanish speakers by 2050, making it the biggest Spanish-speaking country in the world.2

Financial terms of the transactions were not disclosed.


Editorial Staff

Portada Staff

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