First and foremost, a very happy New Year to all of you. Yes 2009 is here; let’s hope it does not pick up where 2008 left off. I want to start the New Year with an issue that has been talked about a la souto voce for most of the second half of 2008. It has to do with the largest media company serving the US Hispanic market, which of course is Univision.
Many have speculated that it will soon file for bankruptcy, so strong was the speculation recently that Univision issued a statement that it had a very strong balance sheet which would carry it through this economic crisis. Of course the obvious detractors are still out there, mainly Televisa, who would love for that moment to come and possibly put the Programming License Agreement (PLA) in play through bankruptcy court. To them and all others, do not hold your breath, you may find yourself in the emergency room.
There is one caveat; it has to do with the trial under way reference the PLA between Univision and Televisa. I find it astonishing and almost irresponsible that Saban would have closed on the Univison deal without some sort of safety net in the slim but possible chance that they lose this case. But absent this Perfect Storm scenario in the court room, Univision is built and ready to ride out this economic mess. Here are 10 reasons why I do not think Univision will go into bankruptcy.
# 10 – Univision is the heritage network for Hispanics, Latinos turn there first.
#9 – Univision has a solid footing in both the traditional and new media spaces, allowing it to maximize revenues and offer a true 360 approach to advertisers.
#8 – Univision has a solid leadership team in place across all platforms.
#7 – Univision still has expenses it can cut and further streamline operations.
#6 – Univison has assets it can transform i.e. Telefutura or Galavision.
#5 – Univision has finally learned to negotiate win win scenarios with its clients.
#4 – Univision produced shows are also leaders in their time periods.
#3 – Univision cross promotional platforms are extremely effective in driving audience.
#2 – Univision owes over 10 billion dollars to banks and institutions who do not want to be broadcasters. (The old saying is very true here; the more you owe, the more they will work with you).
#1 – Univision has PLA in place with Televisa and Venevision which allows it to control its programming cost (through the PLA, programming cost are tied directly to sales) and always pick ratings dominant shows.
Jose Cancela is Principal of Hispanic USA Inc, a full service Hispanic Market Communications firm. He has also the author of “The Power of Business en EspaÃ±ol, Seven Fundamental Keys to Unlocking the Potential of the Spanish Language Hispanic Market” Rayo / HarperCollins.