Why Wall Street Sees Cash in Cuban TV
By Charlie GasparinoPublished November 17, 2015 FOX Business
A group of influential Wall Street dealmakers are betting that Americans
have such an appetite for Cuban television – everything from sports, to
music to even some government propaganda—that they’re planning to
distribute the island’s TV programming to viewers in the U.S., the FOX
Business Network has learned.
The investors, led by former Perella Weinberg restructuring star Michael
Kramer, plan to air Cuban media content through a new channel, the
CubaNetwork. It will distribute both Spanish and English broadcasting of
Cuban “Television… documentaries, music and music programs, cultural
content, live sports and sports related documentaries… movies and
plays,” according to internal company documents.
Keith Bass, the network’s chief executive, described the new channel as
“the first significant public to private partnership between Cuba and a
The distribution deal with Cuban government officials was signed in
October, after about a year of negotiations. He declined to provide
financial details, but said the investor group paid a significant sum of
money, well into the millions of dollars, for the programming rights.
Bass added that he has met with officials from major cable and satellite
operators to craft distribution deals, and if all goes according to
plan, programming will be available by April 2016. Revenue from
distribution deals will be split with the Cuban government and represent
the majority of the network’s profits.
“We have exclusive rights to the bulk of the Cuban television and media
programming,” Bass said, adding that while the network will be
officially located in Hollywood, the plan is to open an office in
Havana, Cuba’s capital.
Cuban media is relatively obscure; it consists of five separate
television channels, and several radio stations such as Radio Havana,
all of which are government controlled and largely unknown outside the
country. The most popular programs include soap operas, known as
“telenovelas” and various sports programming such as Cuban baseball.
Bass said the CubaNetwork will air both current content and new original
content; one plan is to have a morning show similar to those in America.
In July, President Obama announced that the U.S. government will reopen
diplomatic relations with Cuba after more than 50 years— the first step
toward ending an economic and trade embargo with the country that began
after rebels led by dictator Fidel Castro overthrew the government of
Fulgencio Batista and sided with the Soviet Union during the cold war.
While many trade restrictions still exist, Bass said that
telecommunications was one of the few areas of business that can take
place between the two countries immediately.
“The new relationship allows us to actually pay television producers in
Cuba to produce new content,” he added. “We didn’t need government
A state department spokesman had no immediate comment. Nor did a
spokeswoman for the Cuban embassy in Washington.
The sanctions against Cuba are codified in six laws, and legal experts
are divided as to whether the President can unilaterally circumvent
these regulations through executive privilege, or whether he needs
Congressional approval to end the embargo.
But Jodi Bond, vice president of the Americas for the International
Division at the U.S. Chamber of Commerce, said Obama, in re-establishing
diplomatic relations between the two countries, issued a special “carve
out” provision to allow telecommunications and information technology
business between the two countries. Bond said she has met with Cuban
officials recently and that major businesses like Google and Sprint are
either looking or in the case of Sprint, have already cut deals to do
telecom business with the Cuban government.
She described the plans for the CubaNetwork as “rather significant” and
a “big deal” since most of the media in the country has been closed to
outsiders; the Cuban government has heavily censored media coming into
the island as well. “There used to be a time when the government would
actually block out the images of Cuban major league baseball players
during broadcasts, but that’s changing,” Bond said.
Something like the CubaNetwork “just has never been done before…they
have their own TV personalities that relatively few people in the U.S.
know about,” she added.
One unknown is the appetite by an American audience for Cuban-specific
programming. Spanish language television programming is dominated by two
networks, Telemundo and Univision, which has tapped into the growth in
the Hispanic population with its own programming such as soap operas and
news broadcasts in Spanish.
But Bass said the CubaNetwork’s appeal is broader; he’s also looking to
introduce the Cuban culture and society to an English speaking U.S.
audience who may want to travel to Cuba either on business or for
leisure, which is why some programming will be broadcast strictly in
English, and Spanish with English subtitles.
The network is also likely to face some criticism from pro-democracy
Cuban-American groups, who continue to oppose the Castro regime, now led
by President Raul Castro, Fidel’s younger brother, for its
well-documented, record human rights abuses. Presidential candidate and
Florida U.S. Senator Marco Rubio, whose parents fled Cuba after the
revolution, recently told Fox News “You have two tyrannies – one in
Iran, one in Cuba – both receiving significant concessions from this
president [and] the most powerful and important country in the world,”
referring to the nuclear arms deal between Iran and the U.S. that the
president pushed without the full support of Congress, and Obama’s
efforts to re-establish ties with Cuba.
Rubio has vowed to reverse Obama’s new Cuban efforts until democracy is
restored to the country; a spokesman had no immediate comment.
“The hardliners will say any programming out of Cuba will be a bunch of
propaganda,” Bond said. “But a lot of Cuban Americans also are coming to
understand times are changing and they’re more open” to engagement.
Bass told FOX Business that he is cognizant of the ramifications of
airing pro Castro news broadcasts in the U.S. and for that reason, most
of the programming will focus on cultural issues, travel and sports.
“We’re looking at a lot of things other than the political side,” he
added. He also plans on offering video content over the internet.
As reported by FOX Business Network, Kramer, one of Wall Street’s best
known dealmakers in the field of corporate restructurings, was ousted
from Perella Weinberg earlier this year amid a long-running management
dispute with the boutique investment bank’s managing partners Joseph
Perella and Peter Weinberg. Both sides have filed lawsuits; Kramer
contends that he was improperly denied tens of millions of dollars in
compensation and the firm breached his employment agreement; Perella
Weinberg said Kramer violated his non-compete clause when he sought to
create his own firm.
Since then Kramer has continued to do restructuring work through his new
firm, Ducera Partners. One of his most recent deals includes
representing bond holders in the restructuring of Puerto Rico’s troubled
His role in the CubaNetwork is separate from his restructuring practice,
and involves what he described as a personal stake in Caribbean
Broadcasting Network, which distributes English and Spanish language
programming in Puerto Rico and the U.S. Virgin Islands. Bass described
the CubaNetwork as an “affiliate” of Caribbean Broadcasting.
Charles Gasparino joined FOX Business Network (FBN) in February 2010 as
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