Azteca America Launches In San Francisco & Houston.

TV Azteca, S.A. de C.V. announced that two new US full power stations-Pappas Telecasting Companies’ KTNC-TV Channel 42, and KAZH-TV Channel 57-have joined its Azteca America Network as affiliates. KTNC-TV covers San Francisco, Oakland and San Jose as well as Sacramento, Stockton and Modesto, California; KAZH-TV covers Houston, Texas. The addition of these stations brings Azteca America’s coverage of the US Hispanic market to 28%.

“Azteca America is the most important strategic expansion of our core TV business outside of Mexico,” commented Pedro Padilla, Chief Executive Officer of TV Azteca. “Expanding our US distribution base leverages our existing programming library and increases our effectiveness in competing for audience share and advertising dollars in the fast-growing US Hispanic marketplace.”

TV Azteca also acquired a 25% equity stake in the new affiliates from Pappas Telecasting Companies for US$70 million. TV Azteca used internally generated funds to complete the acquisition. The acquired stations are debt free, and will provide a platform to leverage US assets with which to finance further expansion.

“These new stations, along with our Los Angeles affiliate are the anchor for our US network-building strategy,” commented Luis J. Echarte, President and CEO of Azteca America Network. “Our equity stake provides a growth platform and ensures our participation in the significant flow of advertising revenues likely to come from these two important Hispanic market clusters. As Azteca America expands its reach, it should become a substantial contributor to TV Azteca’s revenue stream and profitability.”

“Our relationship follows the same template used to establish our earlier affiliate agreements in Los Angeles, KAZA-TV Channel 54 and Reno, Nevada, KUVR-TV Channel 68,” added Mr. Echarte. Paralleling these earlier relationships, Azteca America Network will split all revenue 50-50 with the San Francisco-Sacramento and the Houston stations.