Viacom kicked off new CEO Bob Bakish’s tenure by announcing a $345 million acquisition of Televisión Federal S.A. (Telefe), one of the main free-to-air channels in Argentina.
The deal, which Viacom is paying for with cash on hand and expects to be accretive by 2017, will give Viacom control of a channel that reaches 95 percent of Argentina’s 43 million residents and attracts a 33 percent viewership share.
It also happens to come along as Viacom is in the process of exploring a re-merger with CBS, a deal seen by many as vital to the survival of struggling Viacom, which just saw its profits sink 71 percent in the most recent quarter.
But Bakish insisted that the Telefe deal is in no way a warmup for CBS, telling The Hollywood Reporter that the two deals are unrelated.
"I have been chartered by the board to focus on running Viacom as a strong independent company and putting in place a strategy, which will grow the company over time. This move clearly fits with our international strategy, which is an integral component of the overall Viacom growth strategy," Bakish told the publication.
Specifically, he described the Telefe deal as a good way for Viacom to continue to expand its scale outside of the U.S. The acquisition makes sense in the context of other deals Viacom has made to boost international scale, including its purchase of Channel 5 in the United Kingdom. Bakish told The Hollywood Reporter that buying media cornerstones like Telefe and Channel 5 help Viacom “advance our general original content strategy.”
In Telefe, Viacom is getting a network that produces more than 3,000 hours of Spanish-language video content each year, including seven of the top 10 programs currently airing locally, and a library of 33,000 hours of local content, according to a news release.
“By combining Telefe with Viacom’s popular pay TV networks, which include MTV, Nickelodeon, Comedy Central and Paramount Channel, this deal further strengthens [Viacom International Media Networks]’s position in Argentina and Latin America,” said the company in a statement.
In addition to gaining access to Telefe’s content, Viacom will get through this deal eight wholly-owned channels in the interior of Argentina and Telefe Internacional, a pay-TV channel distributed to 10 million subscribers across 17 countries.