SPANISH – Sale May Be Good News for La Opinion

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When the staff of the Los Angeles Times heard that their newspaper was being acquired by the Tribune Co., reporters and editors at La Opinion working a few blocks away at downtown’s Pershing Square were wondering about their own future.

La Opinion, one of the nation’s biggest Spanish-language dailies, is 50 percent owned by Times Mirror Co. The deal has paid obvious dividends for La Opinion, but its benefits for Times Mirror are unclear leading some to wonder what lies ahead following the acquisition.

That was the question that La Opinion reporter Pedro Pulgar put to James Madigan, the Tribune Co.’s chairman, president and chief executive, in a telephone press conference last week.

Madigan was upbeat about La Opinion’s role within the Tribune Co. “We would expect no impact on the (Times-La Opinion) partnership,” he said. “We understand it has been a very good partnership with the people involved, and from what we have seen, it has been a successful joint business relationship that is getting better all the time.”

Home delivery debuts

Until recently, Times Mirror had pretty much been a silent partner in the family-owned newspaper, letting the heirs of La Opinion’s founder run the show.

But in February, La Opinion started offering home delivery for the first time, using the Los Angeles Times’ distribution system. Previously, La Opinion had only been sold on newsstands and racks.

The deal already has added 4,000 new subscribers, said Monica Lozano, the paper’s president and chief operating officer.

In return, the L.A. Times was bundled inside 80 percent of the issues of the Spanish-language newspaper, boosting the L.A. Times’ circulation by about 85,000, Lozano said.

Yet other than that one-time circulation gain, it is unclear what Times Mirror gets out of its deal with La Opinion. When Times Mirror purchased 50 percent of the Spanish-language daily in 1990, terms of the agreement were not divulged. Executives at both papers declined to reveal whether there is a revenue-sharing agreement or any kind of financial arrangement. In its annual report, Times Mirror does not break out revenues from La Opinion.

But analysts believe the Tribune Co. would be wise to keep Times Mirror’s 50 percent stake. “If you want to serve the broader Los Angeles market, you need to keep La Opinion,” said analyst Steven Barlow of Credit Suisse First Boston.

La Opinion is the second fastest-growing daily newspaper in the country, behind the Denver Post, which is selling subscriptions for 1 cent a day, newspaper analysts said.

An Audit Bureau of Circulations report showed that La Opinion’s average circulation for the six months ended Sept. 30, 1999 was 107,000, an 8.2 percent increase over the previous six-month period and that was before home delivery started. With the addition of the service, Lozano said, circulation figures recently rose to 117,000, though updated ABC numbers aren’t yet available.

Tribune is committed

Lozano, granddaughter of the newspaper’s founder, said she plans to meet with Tribune Publishing President Jack Fuller to get more details on the Spanish-language daily’s future. “I received a phone call from Fuller, which led me to believe they are committed to the Spanish-language market,” she said.

Indeed, Tribune Co., which will own 11 daily newspapers after it merges with Times Mirror, has not been blind to the benefits of serving Spanish-speaking residents. Its home base in Chicago has the fifth largest Latino population in the United States, at 1.4 million. Los Angeles has the nation’s largest concentration of Latinos, with 6.9 million.

In 1993, the Tribune Co. flagship Chicago Tribune started the weekly Spanish-language magazine Exito! with 85,000 copies that are distributed for free. The publication’s annual revenues were $3 million, said Tribune Co. spokeswoman Kelly Shannon.

Shannon noted the weekly magazine is still not making money, but sometimes its content, such as a recent interview with Cuban dictator Fidel Castro, is shared with other Tribune Co. publications.

“We’re looking at serving the community in the best possible way we can, and that could be by using combined resources,” Shannon said.

The Tribune Co., which also owns the Ft. Lauderdale Sun-Sentinel in Florida, has also for several years been distributing a weekly zoned Spanish-language tabloid in southern Florida called El Semanal, which has a circulation of 110,000.

Departing Times Mirror CEO Mark Willes felt that the way to increase the L.A. Times’ circulation was to tap the growing Latino market. Analysts say Tribune Co. is likely to follow that strategy.

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