Revenue: $863.5 million
Profit: $116.9 million
In a bid to create a multi-faceted Spanish-language entertainment company and to solidify its hold on Hispanic broadcasting in the U.S., Univision Communications in the last 10 months has made a push into new business areas and expanded its core operations.
Despite some ratings in-roads by smaller rival Telemundo, Univision’s core broadcast network retains its dominant position in audience and ad share. Univision management believes that its operations will be less affected by the softer U.S. ad market than English-language media. When announcing second-quarter results, executives estimated a full-year 2001 revenue increase of 5%-8% to $910 million-$935 million.
Fueling some of that growth are new businesses such as Univision.com, which launched in October 1999 and claimed some 7 million unique users this June — more than 80% of all U.S. online Spanish speakers. In light of the changing Internet ad market, executives said they are tweaking the online business model.
In April of this year, Univision formed recording and publishing subsidiary Univision Music Group, tapping former EMI Latin topper Jose Behar as president and CEO.
In December, it announced the $1.1 billion acquisition of USA Networks’ station group from Barry Diller. Those stations will form a second Spanish-lingo network, Telefutura, which will launch in January with an anticipated 80% coverage of U.S. Hispanic households.
Univision also has acquired its first stations in Puerto Rico, a key territory, where it will launch both networks. Univision believes Telefutura, which it plans to counterprogram against the Univision and Telemundo networks, will only cannibalize about 25% of its audience, drawing mostly from English-lingo broadcasters.
Startup and other costs associated with the acquisitions and new businesses will cut into profits this year.
Univision has secured long-term programming supply agreements with Venezuela’s RCTV and Colombia’s RCN, which, in addition to existing accords with Televisa and Venevision, give it an exclusive lock on a huge chunk of Latin American novelas, the primetime staple of Spanish-lingo TV.