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NBC Winds Up with Telemundo

NBC has won the battle for Spanish-language network Telemundo Network Group
LLC, beating out about four other suitors with a deal worth some $2.7 billion in
stock, cash and assumed debt.

In a conference call with analysts, NBC chairman Bob Wright said the deal is
'exactly what we're trying to do -- we're adding revenue and earnings, and we're
doing it in a way that is completely complimentary to the business we're

According to the deal, Telemundo will receive about $1.98 billion -- one-half
in cash and one-half in NBC parent General Electric Co. stock. NBC will also
assume about $700 million in Telemundo debt.

The deal comes in at a pricey 40 times Telemundo's 2001 estimated cash flow
of about $70 million. But Wright said that multiple only applies to
Telemundo as a stand-alone operation.

'Telemundo won't operate as a stand-alone,' he added. 'The actual multiple is
in the low double-digits.'

Landing Telemundo gives NBC access to the lucrative Spanish-language
advertising market, which had been growing at three times the rate of the more
established U.S. advertising market.

Telemundo had been rumored to be on the block since August, when it was
thought that Viacom Inc. was the front-runner for the network. Since then, other
potential suitors had reportedly entered the picture, including NBC, The Walt
Disney Co., Hispanic Broadcasting Co. and AOL Time Warner Inc.

When it first went on the block, Telemundo was expected to attract a price of
about $4 billion. However, the price dropped as a result of the downturn in the
advertising market exacerbated by the Sept. 11 terrorist attacks.

'It would have been quite a bit more expensive if we had done this four or
five or six months ago,' Wright said. 'Times have changed -- it is a much more
difficult marketplace. We're in a better position to take Telemundo through this
marketplace than they would be by themselves.'

But even at the reported $3 billion that Telemundo's owners -- Sony Corp. and
Liberty Media Corp. -- were asking, it proved to be too expensive for other

At almost $3 billion, Telemundo comes in at a price similar to what Viacom
paid for Black Entertainment Television last year. Viacom paid $3 billion for
BET, a cable network that has about 60 million subscribers.

The deal also represents a substantial premium for Liberty and Sony. Those
two companies and private investor Leon Black first invested in Telemundo in
1998 for $539 million. Liberty and Sony each own about 40 percent of the

Telemundo president Jim McNamara will continue in that position, as will his
senior management team.

Telemundo is available to about 18 million cable subscribers, but it also
comes with 10 broadcast stations that should fit well with NBC's existing
broadcast properties. The network could also find synergies with NBC's cable
properties -- financial-news network CNBC and MSNBC.

NBC president Andrew Lack said the combination presents several opportunities
to offer Spanish-language versions of NBC shows like Today, NBC
Nightly News
, Access Hollywood and The Weakest Link, as well
as sports programs like the 2004 Olympic Games in Athens, Greece.

'Jim [McNamara] and I have just begun to attack that list,' NBC president
Andrew Lack said on the conference call. 'We're looking forward to working

Telemundo will also get access to NBC news resources, as well as
entertainment programming.

'In sports, we have been one-dimensional,' McNamara said on the call. 'We are
woefully undercomedied. As we go forward, we would like to expand our comedy