Univision not likely to sell radio division


Top management at Univision Communications says they would be willing to listen to offers to buy Univision Radio, but they’re not expecting to hear a deal worth taking. Meanwhile, the word is that radio has bottomed out for the company and should improve as the year goes on.

Radio underperformed the much larger TV division significantly in Q1, with revenues down 2.3%.

In the quarterly conference call with analysts, Univision CFO Andy Hobson insisted that radio is getting better. “What we’re seeing in the radio business is a gradual improvement. I think we talked last conference call about this quarter [Q1] being slightly down on revenues, the next quarter, second quarter, being flat to slightly up and progressively getting better in the third and fourth quarter. We continue to see that as we sit here today as Arbitron’s work on improving their samples for PPM begins to take hold and we have more and more history of working with PPM to improve our ratings as well as our sales efforts,” Hobson said. “We think radio has hit bottom for us and is improving,” he added.

So, an analysts asked later, is radio a core business to Univision, or might it be sold off?

“We think of it not as TV and radio, but as rather the local advertising business. We don’t think, as some people do, that radio goes to zero. We think there is a need for local advertisers to have a low-cost entry point to advertise – and radio provides that. Radio also provides a promotional push, where television has historically been more of a branding vehicle. So I guess we consider radio core, but we’re also mindful that maybe there are better people to operate local radio businesses. I guess we would entertain offers, but we don’t really thing that it’s likely that we’d sell at any time in the near to even intermediate future,” Hobson said.

He was then interrupted by COO Randy Falco (pictured): “I think that unlike a lot of the English language radio, this is much more integral to our business. There’s a lot of in-programming promotion, not just 10-15 second promotional spots, but actually in programming, which is incredibly important to us. And it also represents, at the local level, because we do so many local events throughout the country, tied to our radio stations, is a very, very big bridge – and important bridge – to our communities,” Falco told the analysts.

RBR-TVBR observation: Interesting to hear new COO Randy Falco as the voice defending the importance of radio at Univision. Falco is definitely a TV guy, having started his career at NBC in 1975 and stayed there for 30 years before a few years heading AOL before taking the Univision job. Radio was already on the way out in the corporate view at NBC when Falco started his career and the radio assets were sold off in the 1980s.

Spanish media groups clearly have a different view of how to use radio and TV together in this era than their English language brethren. Univision, Liberman and Entravision all use radio heavily to promote their TV operations and tend to integrate operations online to promote all of their media assets. Likewise for Spanish Broadcasting system, which has been big in radio for a long time and is now using its radio assets to drive the growth of its new TV division, where it is currently in an acquisition mode with a TV station buy in Houston.  Unfortunately, SBS doesn’t currently have any radio stations in Houston to help build the audience for that TV station.