By Frank Ahrens and Krissah Williams
Washington Only a generation ago, the national Hispanic media landscape was a spare one, populated by a handful of old-line community newspapers, low-wattage AM radio stations and one struggling television network.
In the coming months, Spanish-language newspapers will debut or expand in Dallas, Orlando and Chicago. Spanish-language radio companies have been buying FM stations that cost $250 million each. Spanish-language television stations are top-rated in major cities. And a merger between the dominant Spanish-language television network and largest radio chain appears about to win federal approval this month, creating the first Hispanic media giant, an entity with enough firepower to reach nearly every member of the nation’s largest minority group.
The Hispanic population spike in the United States and an attendant surge in disposable income over the past decade have driven the media growth. Hispanics passed blacks for the first time as the nation’s largest minority in the most recent U.S. Census, comprising 13 percent of the population, and accounted for half of the nation’s population growth between 2000 and 2002. The Hispanic influence can be felt nationally.
The leader in the Hispanic market is Los Angeles-based Univision Communications Inc. Relative to its audience, Univision wields a clout unequaled by any of its much-larger English-language media counterparts, such as News Corp., which owns Fox broadcast and cable networks and several television stations.
Univision with 50 stations and 43 affiliates routinely gets more than 80 percent of the Spanish-speaking television audience in cities where it broadcasts, distancing rival Telemundo, which has 15 stations and 32 affiliates and is owned by NBC parent General Electric Co. Univision’s KMEX in Los Angeles is the city’s top-rated television station among 18-to-49-year-old viewers.
Now, the Federal Communications Commission appears likely to approve Univision’s $3 billion bid to buy Tichenor’s Hispanic Broadcasting. The merger is endorsed by several Latino leaders and public interest groups, but it has been strenuously opposed by some most notably, rival radio chain Spanish Broadcasting System Inc., whose own bid for Hispanic Broadcasting was spurned last year for Univision’s.
Those who favor the merger say it will improve media choices for Hispanic consumers by giving the combined companies the muscle to compete for advertising dollars with English-language media conglomerates, such as Viacom Inc., which owns the CBS television network, several cable channels and 39 television stations.
“When you go to see advertisers and you walk in to sell something and you’ve got a TV station and he’s Viacom, he can make a better sales pitch,” said Ray Rodriguez, Univision president. “We believe putting our two companies together gets us one step closer to being able to compete better with English-language giants, and that only makes sense.”
Opponents of the merger argue that the Hispanic media audience is essentially a closed market that does not compete with English-language media, a notion Univision and Hispanic Broadcasting dispute. Critics say the merger will give the combined companies a virtual monopoly over the Spanish-speaking audience that the FCC and Justice Department would never allow among bigger media companies.
“Univision already has such a dominant position . . . by adding the No. 1 radio chain to all these other business lines, they are going to be a very anti-competitive, monopolistic behemoth,” said Raul Alarcon, president of Spanish Broadcasting. “This will be the death of Hispanic media from a competitive view.”
The Hispanic media industry is still tiny compared with the English-language giants: Viacom is worth about $74 billion while Univision is valued at $7 billion. Compared with Clear Channel Communications Inc.’s 1,200 radio stations, Hispanic Broadcasting’s 69 stations barely register.
Yet among some Hispanic consumers and smaller media outlets, the prospect of creating a Spanish-language media gigante is worrisome, paralleling concerns about the English-language media industry. Many fear that more consolidation will lead to less localism. Unlike, say, Rupert Murdoch’s News Corp., whose revenue accounts for 2.8 percent of the U.S. media pie, a combined Univision/Hispanic Broadcasting conglomerate could be a big fish in a small pond.
In many ways, the rising arc of Spanish-language media is following that of black radio and television in past generations. The success of Catherine L. Hughes’s Radio One empire and Robert L. Johnson’s Black Entertainment Television network are examples.
Now, Hispanic buying power is growing more rapidly than black buying power, according to a 2002 report by the University of Georgia’s Selig Center for Economic Growth that calculated disposable income. The study estimates that in 2005, black buying power will hit $760 billion; the figure will be $764 billion for Hispanics.
Hispanic media like most minority media have strug-gled to overcome what is often known as the “ethnic discount,” meaning that advertisers have spent less money targeting minority consumers, believing them to be less valuable.
Although Spanish-language television gets 5 percent of the total audience, it gets only 2 percent of the advertising budget spent on television, said Univision’s Rodriguez. Further, he said, 60 percent of advertisers don’t buy time on Spanish-language television. “Those ad dollars belong to us,” Rodriguez said.
Television and radio get about 88 percent of Hispanic media advertising dollars, with newspapers scraping for the rest, Hispanic media executives say. “Univision has done a great job of convincing advertisers that Latinos don’t read,” said Rosanna Rosado, publisher of El Diario/La Prensa, the nation’s oldest Hispanic newspaper, based in New York. Also, she points out, more than one-third of U.S. Hispanics are under 18 years old, a group that typically prefers television to newspapers.
Nevertheless, the Hispanic print is a growing industry, as national newspaper wars attest.
Last month, El Diario was bought from Spanish-language broadcaster Entravision Communications Corp. by an investor group led by California-based Clarity Partners for $19.9 million.
In Chicago, the Tribune Co. hopes to capitalize on the success of Newsday’s Hoy by launching a 25-cent version in September, replacing the free weekly Spanish-language Exito.
In Dallas, Belo Corp.’s Morning News will launch the six-day-a-week Al Dia in October, aimed at the region’s 1 million Hispanics, 90 percent of whom are Mexican. The near-by Fort Worth Star-Telegram, owned by Knight Ridder, has countered by taking its free and profitable La Estrella, which appears twice a week, to five days a week to go head-to-head with Al Dia.
El Nuevo Dia, the largest paper in Puerto Rico, begins a daily tabloid this month in Orlando, home to more than 140,000 Puerto Ricans. The Tribune-owned Orlando Sentinel has published the weekly Spanish-language El Sentinel since 2001.
El Diario’s Rosado said that all Spanish-language media have ridden on the coattails, to an extent, on the rise of Hispanic celebrities.
“We’ve gotten a lot of help from J-Lo and Ricky Martin,” she said. “We’re no longer walking into sales meetings having to convince people that the market exists. Now, we’re fighting for a bigger share of the pie.”
Reprinted from “Hispanic News” (http://www.hispanic.bz/) August 11, 2003.