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CBS exits 2nd cable outlet
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September 24, 1998: 1:31 p.m. ET
Joint venture formed with Medcom of Mexico to operate CBS TeleNoticias
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NEW YORK (CNNfn) - In an effort to exit its money-losing Latin American cable news channel, CBS Corp. has formed a joint venture with Grupo Medcom S.A., a privately held media concern based in Mexico City, to operate CBS TeleNoticias.
The exit strategy is similar to the agreement that CBS reached during the summer with Discovery Communications Inc. for CBS Eye on People, a U.S. cable operation which was also unprofitable.
Stuart Rossmiller, analyst at Merrill Lynch, said the strategic alliances represent CBS President Mel Karmazin telling investors that he wasn't "willing to bear those losses in hopes someday I'll have a valuable asset."
CBS acquired TeleNoticias for an undisclosed amount in June 1996 from a consortium which included Reuters Group Plc and Telemundo Group Inc.
Under the terms of the joint venture agreement, Grupo Medcom will own 70 percent of CBS TeleNoticias and will become the managing partner of the joint venture, which will retain the name CBS TeleNoticias. CBS will retain 30 percent ownership and will continue to provide news-gathering resources and programming.
Financial terms weren't disclosed.
The joint venture will be overseen by an executive board with representatives from both media outlets. The transaction is expected to close during the fourth quarter of this year.
Grupo Medcom operates Infored, which produces "MONITOR," Mexico's leading radio news program for the past 25 years. It is also Mexico's largest publisher of business magazines and operates television and Internet businesses.
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