New York -- Whether it's dollars or pesos, Mel
Karmazin continues to cut costs at CBS Corp.
As expected, the company trimmed its exposure to Latin
America's cable industry, saying last Thursday that it formed a joint venture with
Mexico's Grupo Medcom S.A. that will see its ownership of the unprofitable CBS
TeleNoticias news channels slashed by 70 percent.
CBS, which will retain 30 percent, will also hand over
management control of the joint venture to Medcom, although it will continue to provide
news-gathering resources and programming.
The sale, expected to close by the end of this year,
follows months of speculation that CBS was looking to unload the channels or to bring in a
Bringing in Medcom "will position CBS to capitalize on
the future expansion of cable in Latin America," Karmazin said in a prepared
CBS Cable declined to comment on the value of the stake
that it sold.
Medcom's assets are mainly in Mexican radio and
publishing. It also has a stake in a broadcast-TV channel in the city of Guadalajara.
Published reports said CBS had spoken with Fox, Turner
Broadcasting System Inc., Reuters plc and Venezuela's Cisneros Group of Cos. about
investing in TeleNoticias.
Since buying TeleNoticias in 1996, CBS has built up the
network's distribution to a respectable 10 million cable homes in Latin America and
beefed up its hard- and soft-news coverage and branding.
It has also targeted the Spanish-speaking market in the
United States and Canada with a dedicated channel, and it launched a Portuguese-language
channel in Brazil last year.
However, the channels were unable to make a profit, and the
Brazilian network suffered a number of glitches when it launched in late 1997.
What's more, panregional news channels in Latin
America are relatively poor ratings performers, with hefty competition from local players.