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Wednesday, Jul 6, 2022

Trio of Deals Reshaping Local Hispanic Radio Market

Trio of Deals Reshaping Local Hispanic Radio Market

By DARRELL SATZMAN

Staff Reporter

A spate of end-of-the-year dealmaking will further transform a local Hispanic radio market that already was headed for big changes with the pending merger of Univision Communications Inc. and Hispanic Broadcasting Corp.

Santa Monica-based Entravision Communications Corp. won a bidding war for Big City Radio Inc.’s three Southern California stations in a cash-and-stock deal valued at $139 million.

Meantime, Liberman Broadcasting Co. of Los Angeles, a losing bidder for the Big City stations, will buy Anaheim-based KMXN-FM (94.3) from Astor Broadcast Group for roughly $35 million, according to a person with knowledge of the sale.

With the deals, Big City and Astor exit the local radio dial while Liberman and Entravision shore up their lineups in competing with HBC and Spanish Broadcasting Systems Inc.

If all three pending deals are approved, as expected, Entravision would own six local Spanish-language stations, Univision five, Liberman five and SBS two.

“It’s unusual to see that many stations come up and be available at once,” said Mary Beth Garber, president of the Southern California Broadcasters Association. “The deals make sense because you had two companies with incomplete coverage in this market and the stations that came up allowed them to fill those holes.”

The three stations acquired by Entravision KLYY-FM, KVYY-FM and KSYY-FM have relatively weak signals and are located in Arcadia, Ventura County and San Diego County, respectively. They share a frequency, 107.1, and will share programming through a simulcast just as Liberman will do with its new station, KMXN.

Besides Entravision and Liberman, SBS and Emmis Communications Corp., owner of Los Angeles’ top-ranked KPWR-FM (105.9), also bid for the Big City stations.

Art Astor, president and chief executive of Anaheim-based Astor Broadcast, said he was surprised that the bidding by Entravision went so high a circumstance that helped boost the price for his station.

“(Entravision) was bidding against itself,” Astor said. “They wanted it really badly so they went way above. They could have had it for $110 million.”

Bigger presence

Officials at Entravision, which has 55 stations nationwide, could not be reached for comment. In a written statement, Walter Ulloa, the company’s chairman and chief executive, said the deal was “an important step in broadening our presence in the nation’s largest Hispanic market. The addition of these three stations gives us a larger platform to drive ratings and revenues.”

Given the consolidation that is taking place in local Hispanic radio, Liberman needed a bigger “footprint” to stay competitive with HBC and Entravision by giving advertisers wider reach and opportunities for cross-station buys, said Andrew Mars, a Liberman vice president.

Although it was not the company’s first choice, KMXN appears to be a good fit for Liberman because it shares the 94.3 frequency with the company’s San Fernando-based KBUA-FM. The two signals bump up against one another in eastern Los Angeles County. Now, with Long Beach-based KBUE-FM (105.5), Liberman will cover much of Southern California through a triple simulcast.

“The more (stations) you have the better you are in a position to go to advertisers and show them value,” Mars said. “The consolidation in Hispanic radio is no different than what’s going on in the general market.”

For companies angling to be major players in Spanish radio, it’s important to have a strong presence in Los Angeles, said Rochelle Newman-Carrasco, chief executive of Los Angeles-based Enlace Communications Inc., a Hispanic advertising agency that counts Macy’s, Jack in the Box and Farmers Insurance among its clients.

L.A.’s Hispanic radio market generated more than $850 million in advertising sales in 2001 and is by far the biggest nationwide in terms of both dollars and listeners. Despite a prolonged ad slump, Hispanic advertising remained on a growth curve last year that forecasters expect to continue through 2003.

More than the ability to command higher rates, Newman-Carrasco said consolidation will help draw more national advertisers and bigger budgets because it reflects a maturing industry with powerful players and broad reach.

“Corporate America still underestimates the power of this market,” said Newman-Carrasco. “For those who are still on the sidelines, radio is an easy starting point. It’s flexible and cost-efficient.”

In the most recent Arbitron survey period, Spanish-language radio stations led by HBC’s KSCA-FM (101.9) accounted for three of the top 10 stations in the Los Angeles market.

Liberman’s simulcast on KBUA and KBUE has been narrowing the gap and the addition of KMXN would extend the company’s popular Ranchero format with a signal that outdistanced, if not out-rated, KSCA.

Meantime Entravision has a lot of ground to make up with its local stations. The company’s Super Estrella format on KSSC-FM (103.1) and KSSE-FM (97.5) has lagged behind most of its Spanish-language competitors. The company has not indicated what type of format it will broadcast on the new stations.

“(The Entravision deal) shows you the value of controlling your own destiny,” Mars said. “If they don’t make that acquisition then what position are they in this market?”




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