Telemundo to Buy L.A.’s KWHY-TV for $239 Million

Telemundo Communications Group Inc., the nation’s No. 2 Spanish-language television network, has finalized an agreement to purchase independent Spanish-language station KWHY-TV Channel 22 in Los Angeles for about $239 million, the companies said Monday.

The deal gives Sony-owned Telemundo a second Los Angeles station with a loyal following and advertiser base. It already owns KVEA-TV Channel 52.

When talks began last fall with KWHY--owned by Harriscope of Los Angeles Inc.--the deal would have made Telemundo the first Spanish-language network to own two stations in one market. Federal regulators only recently began allowing such so-called duopolies.

But news of that pending deal was dwarfed in December when leading network Univision announced it had acquired USA Networks Inc.’s group of more than a dozen stations across the country. If approved by regulators, that deal would give Univision duopolies in multiple markets. Univision’s parent company, Univision Communications Inc., is headquartered in Los Angeles.

The acquisition of KWHY positions Miami-based Telemundo to better compete against Univision in the larger network’s corporate backyard. Telemundo is second in the ratings after Univision but has pulled out of a ratings slump in the last 18 months on the strength of its return to popular soap operas.

Univision shares fell 55 cents to close at $37 on the New York Stock Exchange.

The network also recently announced a deal with a popular Mexican programmer for new content. And Telemundo affiliate KVEA-TV has just pledged to increase its commitment to live newscasts, doubling its budget and the size of its newsroom to accomplish that plan.

Los Angeles is the country’s largest Spanish-language media market. The acquisition of KWHY signals the first and most significant move in Telemundo’s ongoing strategy to acquire independent stations nationwide, sources said.

KWHY moved to a bilingual format as the Spanish-language market in Los Angeles exploded. It switched to a Spanish-only format in October 1999, becoming the third such station in the Los Angeles market after Univision’s KMEX-TV Channel 34 and Telemundo’s KVEA.

Analysts have called Spanish-language media “the fastest-growing traditional advertising business there is,” and the competition for viewers has heated up markedly in the last year. Among the new entrants is Azteca America Inc., which last fall announced plans to become the country’s third Spanish-language television network. Azteca America is a joint venture between Mexico’s second-largest broadcaster and Pappas Telecasting Inc. of Visalia, Calif.