Did A Poor Political Play Hurt Entravision?

By on Nov, 3 2016 with Comments 0

For Hispanic-targeted media company Entravision Communications, digital dollars are growing.

The problem is these dollars account for a fraction of the company’s earnings, and both the television and radio division slumped in Q3.

The result: Entravision saw net revenue fall 6%, to $65.3 million, as net income sailed southward by 42%, from $9.3 million to $5.42 million.

“During the third quarter we faced challenging comparisons to last year’s third quarter,” Entravision Chairman/CEO Walter Ulloa said ahead of the company’s quarterly conference call with analysts. “We continued to grow our core television advertising revenue (excluding retransmission consent revenue and political advertising revenue), but these increases were offset by decreases primarily attributable to the loss of non-advertising revenue from a telecommunications operator.”

He noted that its digital segment revenue was strong, as Entravision continues to build a digital footprint through Pulpo Media.

Digital net revenue jumped ahead 15%, to $5.75 million.

“Looking ahead, we remain well positioned to build on our success in further attracting Latino audiences, expanding our advertiser base and monetizing our reach to the benefit of our shareholders,” Ulloa believes.

For now, the focus clearly requires Entravision to turn around both its TV stations, which have suffered ratings and revenue declines as its Univision and UniMás affiliates face a strong challenge from Telemundo, and its radio stations.

Radio net revenue fell 8%, to $19.17 million. Television net revenue declined 7%, to $40.4 million.

Overall, Free Cash Flow slid 33%, to $11.93 million.

Did an overestimation of political dollars play a role in the disappointing quarter for Entravision? The company noted during its analyst call that both presidential candidates have not invested heavily in any Spanish-language or Hispanic-targeted media, let alone with Entravision.

Thus, while there was an increase in political revenue at both radio and TV, it wasn’t as much as the company anticipated. An overall decrease in local advertising revenue for radio points to weak advertiser activity.

 

 

About The Author: Adam R Jacobson is a veteran radio industry journalist and advertising industry analyst with general, multicultural and Hispanic market expertise. From 1996 to 2006 he served as an editor at Radio & Records.

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