Viacom & SBS Announce Strategic Alliance.

Viacom and Spanish Broadcasting System, Inc. announced that they are joining forces to more effectively target Hispanic consumers through a multimedia platform that would include radio, television and outdoor throughout the United States. The announcement was made by Leslie Moonves, Co-President and Co-Chief Operating Officer of Viacom and Raúl Alarcón, Chairman and CEO of Spanish Broadcasting System (SBS).

Under the terms of the transaction, Viacom’s Infinity Broadcasting will merge FM radio station 93.3 FM serving the San Francisco market into SBS in exchange for an approximate 10% equity interest in SBS. Infinity will also receive warrants that will allow it to increase its equity stake in SBS by approximately another 5%. This transaction will require regulatory approval. Terms of the agreement were not disclosed.

SBS will reformat the station and launch what will be the single most powerful Spanish-language radio station in the Bay area.

“Viacom has been carefully monitoring the progress and expansion of the domestic Hispanic market and we believe that a great opportunity exists for our deeper involvement in this exciting growth sector,” said Moonves. “We fully expect our commitment to this marketplace to continue and we’re excited about establishing a partnership with a successful broadcaster such as SBS.”

Moonves added, “I would also like to extend my thanks to Joel Hollander and the team at Infinity who were instrumental in securing this important agreement with SBS.”

Raúl Alarcón stated, “This alliance of SBS and Viacom will create a unique and compelling multimedia platform targeting the eyes and ears of U.S. Latinos for years to come. I am particularly gratified that one of the largest media companies in the world has validated the inherent value and expertise of SBS by choosing to partner with us to capture the future of this dynamic growth market,” added Mr. Alarcón. “I’m grateful to Infinity management and Viacom for its confidence in affording SBS this opportunity.”

SBS has also entered into a cross-promotional agreement with CBS and Viacom Outdoor whereby the three business units will work together to more effectively market their respective properties. Infinity Solutions and Beyond, Infinity’s in-house marketing and sales group, will also partner with SBS and work towards increasing both companies’ national and regional advertising revenue.