Lacking Euphoria: Univision’s Q3 Radio Concerns

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FORT LAUDERDALE — Here in South Florida, there’s an abundance of Spanish-language radio stations, offered by such media companies as Spanish Broadcasting System (SBS), iHeartMedia and independent operators such as Actualidad Radio, which boasts the No. 1 spoken-word radio station en español in the U.S.


That makes it all the more challenging for Univision Radio to compete for listeners and dollars.

Similar challenges are being seen in key markets such as Los Angeles, Dallas and Puerto Rico. The result: Univision’s Q3 earnings had one big blemish, and it’s the radio-fueled Uforia division, led by Univision Radio President Jesus Lara.

Hired nearly three years ago from rival SBS, Lara finds himself under more pressure than ever as the head of Univision Radio.

For the Uforia-branded Univision Radio division, adjusted OIBDA slipped to $18 million, from $22 million. Core revenue was statistically flat, rising by $200,000 to $63.2 million.

Ad revenue in the radio division fell 4%, to $60.4 million, non-political.

This led Univision to see a radio segment revenue dip 1.8% to $65.2 million, from $66.4 million.

The culprit? “Declines in ad spending in the automotive and financial sectors partially offset by food and other categories,” the company said in a release — the only mention of Univision’s radio stations made, even during analyst questions.

On his company’s Q3 earnings call for analysts and investors, CEO Vince Sadusky noted that the company as a whole is starting to see positive results from its efforts to improve Univision’s core operations.

And, the ad sales team across the Media Networks segment, the juggernaut that received all of the attention on the Univision call, is closing the gap to attract ad dollars “our ratings warrant.”

There is growth in advertising, and in subscription revenues. Sadusky also waxed poetic about how Univision is strengthening its connection to viewers from a content perspective and — without mentioning NBCUniversal Telemundo Enterprises’ Telemundo network by name — pointed to ratings beats, time spent with Univision and how the Univision and UniMás offerings, in addition to Galavisión, “are a great value” compared to other media outlets.

And, Sadusky thinks Univision is in a great position to benefit from a strong political ad year.

That said, Radio is a problem area putting a damper on solid overall growth for Doral, Fla.-based Univision.

Overall, Univision Communications’ Q3 revenue increased to $681.4 million, from $628.2 million.

Operating income grew to $195.4 million, $113.4 million. On a continuing operations basis, revenue jumped to $206.3 million, from $189.9 million.

This helped bring Univision Q3 net income of $77.4 million; that’s up from $12.4 million on a continuing operations basis.

However, it is very clear that Univision’s Media Networks are fueling the company’s revenue — not the 58+ AMs and FMs in the Uforia stable. Media Networks adjusted OIBDA moved to $260 million, from $228.8 million.

Revenue for the segment increased 9.7%, to $616.2 million from $561.8 million. Media Networks advertising revenue improved by 2.1%, to $322.4 million from $315.8
million. The improvement is primarily due to higher Digital advertising revenue.

With many Hispanic marketing and advertising industry professionals gathered in San Diego for the 21st annual ANA Multicultural Marketing & Diversity Conference, Deutsche Bank analyst Aaron Watts asked what many attendees had on their minds across the continent: What’s the latest on Univision’s strategic review?

“It’s still ongoing … There’s nothing we can really say about it,” Sadusky responded.

Univision declined to take questions from RBR+TVBR during the analyst call.

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