New York-Eight months after Univision Communications Inc. pulled the plug on a $39 million agreement to acquire Gems Television, rival Telemundo Group Inc. signed a contract to acquire the women's Spanish-language cable channel, Telemundo executives said last week.
Telemundo plans to buy the Miramar, Fla.-based channel from owners Cox Communications Inc. and Venezuelan media company Empresas 1-BC, which each own 50 percent stakes. The deal still hasn't been finalized, Cox spokeswoman Amy Cohn said.
The sale follows Cox's "ongoing strategy to monetize some of our off-balance-sheet investments," Cohn said, noting that the MSO recently sold its stakes in U.K. programmer Flextech plc and E! Entertainment Television.
Telemundo CEO Jim McNamara announced the deal during the network's upfront presentation here last Monday.
"This acquisition will enable us to take advantage of our production capability and our programming library and provide Gems for the first time with a broadcast cross-promotional platform in the United States," McNamara said, adding that Telemundo sales executives will represent Gems during the upfront season.
Gems has struggled to gain significant distribution since it launched in 1993. The channel counts 7.2 million subscribers in Latin America and 6.4 million U.S. subscribers. But the network said it only reaches 2.8 million Hispanic homes in the United States, some through a distribution strategy involving low-power television stations that it launched last year.
"It was a matter of cable-coverage issues and the assurance of long-term access to distribution," Univision president Henry Cisneros said last week, when asked why his company pulled out of its deal to acquire the channel. Univision still owns the Spanish-language cable channel Galavisión.
In an interview in November, Gems president Gary McBride said that after the Univision deal fell through, the network wasn't actively seeking a new owner.
"In some timely fashion, we'll continue to have discussions with potential suitors, but there's no real urgency to get it done," McBride said. "And it may be better to cool those conversations off and get back to fundamentals. It's too distracting."
McBride was unavailable for comment last week, a Gems spokeswoman said.
Gems is at a "breakeven level," McBride said in November, adding, "We are in a mildly profitable position."