Walt Disney Co's ABC News and Univision are teaming up to launch an English-language news and lifestyle network targeting Hispanics, the fastest-growing group in the United States, the companies said on Monday.
The unnamed channel will begin broadcasting in 2013, and ABC and Univision will share news gathering and production costs, the companies said. Each company will own about 50 percent, a person with knowledge of the venture said. Other financial terms were not disclosed.
Cable news is a competitive and crowded landscape. CNN, MSNBC and Fox News are in battle for viewers' attention and time. At the same time, broadcast network news is facing a shrinking and aging audience.
ABC and Univision - which started exploring a relationship more than a year ago - are banking on the growing number of Hispanics in the United States to flock to the new network. Hispanics currently represent 16 percent of the U.S. population, and the number is expected to grow to 30 percent by 2050.
Univision has the largest audience of Spanish language television viewers in the United States, according to Nielsen ratings. Univision is owned by Saban Capital Group, Madison Dearborn Partners, Providence Equity Partners, Texas Pacific Group and Thomas H. Lee Partners.
Univision reported a $14.1 million loss in the quarter ending March 31, compared with $74.1 million a year earlier. The company has $8.9 billion in debt, much of it taken on when it went private following its 2007 acquisition.
ABC News has partnerships with other news organizations including the BBC, Bloomberg and Yahoo Inc.
"We are excited about the challenge," said Ben Sherwood, president of ABC News. "It's a very specific focus that will attract a large and growing audience."
The new network gives ABC "the potential to use another partner, Univision, to help cover a lot of their news gathering costs, which I think is probably a big advantage," said Barton Crockett, analyst at Lazard Capital Markets.
The venture, which is still searching for headquarters, is in the beginning stages of discussing distribution deals with cable providers to carry the news and lifestyle channel. Disney has a wealth of experience negotiating with cable operators for its current family of networks including the ESPN sports powerhouse and the Disney Channel.
"We think it will have broad appeal beyond our community," said Cesar Conde, president of Univision Networks, referring to the new network.
(Reporting By Jennifer Saba in New York and Lisa Richwine in Los Angeles; Editing by Gerald E. McCormick, Leslie Gevirtz and Matthew Lewis)