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During the 1970s and 1980s, WKAQ-TV, then branded as "Telemundo Canal 2" ("Telemundo Channel 2"), had become a major producer of telenovelas.
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In an effort to boost its tepid ratings and quell complaints from advocacy organizations such as the National Hispanic Media Coalition that criticized both networks for not featuring content relatable to American Latinos, Telemundo outlined a new strategy to better compete against Univision by increasing production of domestically produced programs.
In 1995, under the direction of executive vice president of programming Harry Abraham Castillo, Telemundo opened its first network studio on the West Coast.
Telemundo's effort faced an initial setback when Mexico's leading broadcaster, Televisa, purchased production company Capitalvision, which had been producing the telenovelas in conjunction with the network.
Parent company Telemundo Group experienced major financial challenges during this time, filing for Chapter 11 bankruptcy protection in 1994, due to a debt load of more than 0 million that the company owed to its creditors.