Azteca America Spot Sales and Hispanic Independent Television Sales (HITS) continue to operate, but owner-to-be Hispanic Independent Television Sales LLC has been responsible for paying the bills since Monday. Once the bankruptcy court gives approval, the buyer, a subsidiary of Cross-MediaWorks, will pay up to $150,000 to acquire the TV rep firms. That figure is “up to” because part of the payment is dependent upon being able to nail down new contracts with key clients. Cross-MediaWorks COO Larry Rubin sees a strong growth opportunity.
“We are very big believers in the growth of Hispanic media,” Rubin told RBR/TVBR. Freed from Interep’s financial constraints, he said it could be possible for the TV rep firms to emerge “riding a rocket ship.”
The Hispanic TV rep firms will be the fifth acquisition for Cross-MediaWorks, which was launched in 2007. “We sell all platforms,” Rubin said, but the main focus is television, including both spot and long-form (infomercial) advertising. The most familiar name might be TelAmerica Media, which inserts spots on cable television systems – some 700,000 insertions daily.
Rubin called the existing staff at HITS and Azteca America Spot Sales “a terrific group of players.” The contract states that rep firm President Tom Marsillo has agreed to be employed by the buyer, as have Brian McCullough, Rick Schwartz and Noeli Sanchez. Since staffers are still working out of the Interep offices, although the bankruptcy trustee no longer employs them, the trustee has asked the court to schedule a hearing to approve the sale ASAP.
Once the deal is approved by Judge Robert Drain, Hispanic Independent Television Sales LLC will pay $50,000 cash to the trustee and place $100,000 in escrow. If within 90 days the new owner succeeds in signing replacement contracts with Dish Network and DirecTV, $50,000 will be released to the trustee. If that occurs and also within that 90-day period the new owner also signs replacement deals with any two of six other key clients, the entire escrow will be released to the trustee. Those other key clients are Una Vez Mas, KAZA, Pappas Telecasting, McGraw-Hill Broadcasting, Spanish Broadcasting System and TVC Broadcasting.
Cross-MediaWorks is privately funded and still looking for acquisitions, although Rubin noted that he is also focused on organic growth at the companies already acquired. Rubin is a former executive of Viacom and USA Network. Prior to Cross-Mediaworks he was at Turner Media Group, which is not related to Turner Broadcasting.
RBR/TVBR observation: Interep made a smart move when it made its first foray into television representation in November 2005. Univision and Telemundo dominated the Hispanic TV spot sales marketplace as national reps for their own stations and affiliates (a special dispensation not allowed for the major English nets), but that still left a sizeable hole to fill repping other Spanish stations and cable/satellite nets. This is definitely a growth business, but it wasn’t enough to save Interep from being dragged down by the financial pressures on its much larger radio operations.