PE Firms Digitize Latin America

Media giant Hicks, Muse, Tate & Furst, is about to make its massive stable of Latin American media holdings even bigger.

Hicks, Muse, along with Liberty Media Corp. (through its wholly owned subsidiary Liberty Media International), and Motorola Inc. Broadband Communications Sector have come together to form Digital Latin America (DLA), an entity they’re calling a “digital launch initiative.”

According to Hicks Muse, DLA will accelerate the launch of digital programming and Internet services to cable subscribers throughout Latin America and the Caribbean. DLA will provide service and hardware to cable system operators to help them convert from analog to digital “for a couple of hundred thousand to install instead of a couple million,” said Dan Blanks, a partner at Dallas-based Hicks, Muse, Tate & Furst.

“DLA will have very large appeal,” he added. “We have a number of analog systems we haven’t been able to justify converting to digital [because of the expense]”.

DLA is a combined offering that is based on Society of Cable and Telecommunications Engineers standards for Advanced Television Systems Committee compliance.

The goal is to provide cost effective and technologically advanced digital technology platform so that multiple system operators (MSOs), in turn, can offer digital audio/video programming, Internet services and access control to their subscribers. Motorola is providing the digital technology platform that DLA is using.

Digital Diversification

As an example of the opportunities DLA will provide, consider Hicks Muse’s ownership of American Sports Network. The private equity firm will now be able to sell this network to local cable broadcasters that might offer it as a premium channel to certain customers.

“We’re on all sides of the deal,” Blanks said. “The combination makes a lot of sense for us.”

“We believe DLA is the key to unlocking the value created by the convergence of media and telecommunications in Latin America,” said Thomas Hicks, chairman and chief executive of Hicks Muse, in a prepared statement.

“The ability to provide digital programming and broadband Internet services to Latin American cable subscribers at a significantly reduced capital cost to the MSOs should increase customers’ programming choices and accelerate Internet adoption in the region” Hicks added.