MIAMI — Univision Communications reported net income of just $5.9 million for the first quarter vs. $20.7 million a year ago — a 71% decline attributed to red ink in its online division and a one-time charge for a cost-cutting initiative.
Univision took the one-time charge of $11.9 million to cover cost reductions it hopes will cushion against the blows of a softening economy.
While all media are being affected by the economic slowdown, “We believe the impact on our company has been and will continue to be less severe,” said executive vice president Andrew Hobson.
First-quarter revenue at the Spanish-lingo media company grew 7% to $194.9 million, including $700,000 from online revenue — a stream that didn’t exist a year ago. The core TV network business saw 7% revenue growth in the first quarter, though ratings were down slightly vs. a year ago.
Excepting the 15% revenue license fee paid to programming suppliers Televisa and Venevision, and sports rights (which will cost $25 million-$30 million this year), all other TV expenses will decrease this year, Univision said.
Recent census numbers on the growth of the U.S. Hispanic population help support the network’s standing with advertisers, execs said, as does Nielsen’s planned expansion of its Hispanic-home sample.
Growth at the TV network division will likely slow to 1%-4% for the second quarter, but end up at 7%-10% for the year, execs project. The online division will continue to generate heavy losses this year, though execs said revenue will ramp up.
Also cutting into full-year profits will be the investments in a new music division and in the second TV network Univision plans to launch in January, pending regulatory approvals for its acquisition of the former USA Network station group.
Execs were mum on the programming strategy for the second network except to say they aim to bring in the 40%-45% of the Spanish-dominant Hispanics in the U.S. who do not watch Spanish-lingo TV.