Viacom and SBS pact for cross-platform assault on Univision
Viacom and Spanish Broadcasting System announced a strategic alliance targeting Hispanic consumers through a multimedia platform that would include radio, TV and outdoor throughout the US. The announcement was made by Les Moonves, Co-President/Co-COO of Viacom and Raul Alarcon, Chairman/CEO of SBS.
Under the deal, Viacom's Infinity Broadcasting will merge its KBAA-FM San Francisco into SBS in exchange for an approximate 10% equity interest in SBS. Infinity will also receive warrants that will allow it to increase its equity stake in SBS by approximately another 5%. SBS will reformat the station and launch what will be the single most powerful Spanish-language radio station in the Bay area.
In addition, SBS has also entered into a cross-promotional agreement with CBS and Viacom Outdoor whereby the three business units will work together to more effectively market their respective properties. Infinity Solutions and Beyond, Infinity's in-house marketing and sales group, will also partner with SBS and work towards increasing both companies' national and regional ad revenue.
"Viacom has been carefully monitoring the progress and expansion of the domestic Hispanic market and we believe that a great opportunity exists for our deeper involvement in this exciting growth sector," said Moonves. "We fully expect our commitment to this marketplace to continue and we're excited about establishing a partnership with a successful broadcaster such as SBS."
Moonves added, "I would also like to extend my thanks to Joel Hollander and the team at Infinity who were instrumental in securing this important agreement with SBS."
Added Alarcon, "This alliance of SBS and Viacom will create a unique and compelling multimedia platform targeting the eyes and ears of U.S. Latinos for years to come. I am particularly gratified that one of the largest media companies in the world has validated the inherent value and expertise of SBS by choosing to partner with us to capture the future of this dynamic growth market. I'm grateful to Infinity management and Viacom for its confidence in affording SBS this opportunity."
RBR observation:
Forget about this move going against Clear Channel's recent announcement to convert 20-25 stations to Spanish-language (9/16 RBR Daily Epaper #181), this is head-to head with Univision. This is Viacom's big move into the Hispanic marketplace. Viacom cable nets could be converted to Hispanic programming; Viacom may come up with additional nets. This is a very strong move for SBS as well. With cross-platforming, SBS can build larger stations and really get penetration in perhaps larger markets in the Southwest. Viacom now has access to is the #1 Hispanic language station in LA, NY, Miami and possibly San Francisco when the KBAA format switch is done. Interep will benefit as well, as it currently reps Infinity and SBS stations. Infinity will likely decide, a la Clear Channel, to convert some of their weaker-performing stations to Hispanic as well. Remember, radio is a bigger force in the marketplace for Hispanic than it is for general.
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