Still on a Roll

Dollars adding up for Hispanic TV/radio

The recent announcement that Univision is putting itself up for sale—and the list of list of potential suitors—is yet another indication of the attractiveness of Hispanic broadcasting assets.

Even in the face of competition from new and existing sources, media targeting Hispanics are making strong gains in revenues.

The most striking evidence of that growth is the further entry into this marketplace by large broadcast groups. Clear Channel, Infinity and NextMedia are changing the formats of some of their existing stations, and others are acquiring properties.

In the local-TV marketplace, stations affiliated with the major Hispanic networks are growing faster than the overall market. In 2000, stations af-filiated with either Univision or Telemundo accounted for 3.2% of all TV-station revenues. By 2004, that percentage had increased to 5.7%, even with all the political advertising being generated by stations affiliated with English-language networks.

That percentage will increase in 2006, exceeding 7% of the total TV-station pie.

That actually understates the importance of the Hispanic-network affiliates. The figure includes revenues of all markets, even those that don't have Hispanic affiliates. In markets where there are Hispanic affiliates, the average share of revenues for the Univision and Telemundo affiliates was 8.5%.

Even in markets without a large Hispanic population, those stations are growing fast. In the Washington market, where only 9.6% are of Hispanic origin, the revenues of Univision-, Telemundo- and Telefutura-affiliated stations grew at a 25.7% compounded annual growth rate between 2000 and '04.

Similar examples of significant growth are also occurring in the radio industry. In 2000, there were only 388 stations whose primary format was Hispanic-oriented programming. By the beginning of 2006, there were 763. In 2000, Hispanic radio stations generated 2.6% of the total radio revenues. That figure could grow to 6.5% this year.

Continued strong growth in revenues generated makes Hispanic media intriguing to financial backers and station groups, which should help Univision. The winner will likely be a well-funded company (or consortium of companies) that is currently not in the over-the-air television industry, because a majority of the most-logical buyers are already near or at the coverage-ownership limit set by the FCC. Whatever company gets in the door will likely have a rich future. There's a lot of room to grow. Fratrik is a VP of BIA Financial Network, a financial/strategic advisory firm serving the media industry.