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On November 25, 1997, Liberty Media and Sony Pictures Entertainment purchased a majority interest in Telemundo from Reliance Capital Group for 9 million, beating out a bid made days earlier by an investment group led by Telemundo Group chairman Leon Black, who had already owned 40.3% of the network through Apollo Global Management and remained a minority partner in Telemundo Group through the purchase; under the deal, Liberty acquired a 40% interest and Sony (which made its entry into domestic broadcasting ownership with the deal) acquired a 35% stake in Telemundo, with the remaining interest held by investment firms Apollo Global Management and Bastion Capital Fund.

On November 25, 1997, several investors who held shares in Telemundo Group filed an injunction to block the sale in a Delaware Chancery Court, in order to investigate whether executives were shortchanging shareholders in accepting the offer; that request, as well as a separate injunction request by Univision Communications, were later rejected.

This "new era" broke from the conventional Spanish-language programming model, the changes made for the 1998–99 lineup included the complete removal of telenovelas from its prime time schedule, citing the inferior quality of the South American serial dramas that it had been acquiring compared to the Mexican serials from Televisa that were carried by Univision.

The revamped evening lineup that premiered on September 28, 1998 included several new sitcoms, traditional scripted dramas and game shows with higher production values, including several scripted shows that were remakes of English language series owned by Columbia Tri Star Television (now Sony Pictures Television), to position the network as a younger-skewing alternative to Univision more acculturated to assimilated American Latinos.

The network also began to produce its own original telenovelas, the first of which to premiere were Angélica, mi vida ("Angelica, My Life"), Marielena, Guadalupe, Señora Tentación ("Lady Temptation") and Tres Destinos ("Three Destinations").

International distributors soon approached the network for the syndication rights to air these programs on television networks in other countries.

During the 1970s and 1980s, WKAQ-TV, then branded as "Telemundo Canal 2" ("Telemundo Channel 2"), had become a major producer of telenovelas.

The station was also known for its "fingers" logo – a bold number "2" with the silhouette of two upright fingers inside the number – and referred to itself as "El canal de los dedos" ("The Channel of the Fingers").

The network then launched an image campaign using the slogan "Lo mejor de los dos Mundos" ("The Best of Both Worlds"), with several billboard ads being erected in cities such as Miami and San Francisco as part of the campaign, heralding a "new era" for Telemundo.

Tortorici dramatically overhauled Telemundo's schedule in an effort to boost its viewership among American Spanish language audiences, as its total audience share had slid from more than 40% early in the decade to less than 20% (and only a 13% share during prime time) by 1998.

Housed at Raleigh Studios in Hollywood, the network began daily production of three shows on the lot that year: La Hora Lunática ("The Crazy Hour"), a daytime talk-variety show hosted by Los Angeles radio personality Humberto Luna, comedians Mario Ramírez Reyes "El Comodín" and Hugo Armando, and producer Jackie Torres; El y Ella ("He and She"), a daily talk show focusing on gender-related issues that was created and produced by Gigi Graciette, who co-hosted the program with Antonio Farre; and Dando y Dando ("Giving and Giving"), an audience and viewer participation game show hosted by Rafael Sigler.

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