Westinghouse/CBS Enters Latin Market

Seeking to shore up its weakness in international news and in cable, Westinghouse/CBS said Thursday that it will buy the world’s leading 24-hour Spanish-language cable news channel for an undisclosed sum that sources estimate at less than $25 million.

The purchase of Telenoticias from the Spanish broadcaster Telemundo is one of several cable deals CBS has in the works, according to cable industry and Wall Street sources. While rival networks have expanded aggressively into cable, CBS has until now concentrated on its core broadcasting business, holding only a minority stake in the Country Music Television channel controlled by Gaylord Entertainment.

“CBS is way behind the curve,” one Wall Street source said. “But a series of coming announcements could remedy the problem.”

While CBS’s latest outlay is relatively small, the company says the growth prospects are enormous because of the booming Latin market. Several media companies, including News Corp., have announced satellite television and cable ventures in Latin America over the last year, despite the near-term losses due to the immature advertising market.

Telenoticias, which reaches 20 million homes, mainly in Latin America and Spain, has been losing money since its launch 18 months ago.

CBS plans to expand the service into the U.S. market by the end of the year. It also plans to continue supplying Telemundo’s half a dozen Spanish-language TV stations with nightly news. Telemundo is getting trounced in the ratings by rival Univision, whose Spanish-language station in Los Angeles, KMEX, is top-rated in news, beating out NBC, ABC and CBS in key demographics.

Two years ago, NBC started its own 24-hour Spanish-language news channel, Canal de Noticias NBC, which now has 5 million subscribers in 20 countries outside the United States.

NBC says that it would like to expand the channel into the United States, but cable operators say those plans have largely been thwarted by a scarcity of channel capacity and the relatively low penetration of cable in Latino households.

Michael Jordan, chief executive of Westinghouse/CBS, has vowed to build the company’s cable assets, which are key to capitalizing on the growth of television abroad.

Sources say CBS is exploring new cable launches with Discovery Channel. CBS has approached cable operators about carrying a joint venture channel called “Eye on Biography” in exchange for the rights to continue broadcasting the CBS signal.

CBS’s contracts with cable operators to retransmit their signal begin expiring later this year. While cable operators previously paid for those signals, CBS is now trying to exchange those rights for cable carriage, as Fox and NBC did to launch fX and America’s Talking, respectively.

In addition, CBS is thought to be a leading candidate to buy Gaylord Entertainment, owner of The Nashville Network, a successful country-music channel distributed by Westinghouse’s Group W.