Univision: Prepare To Deal
Spanish Broadcaster To Seek Cash
By Mike Reynolds -- Multichannel News, 6/1/2008 10:00:00 PM
Distributors can expect a letter from Univision Communications this week declaring its intent to negotiate retransmission-consent deals for its TV stations.
How much compensation the Spanish-language media giant will get will become apparent during negotiations in the weeks and months ahead. But Univision executives will be pushing hard for the stations that carry the top-ranked Spanish-language service and its broadcast sibling Telefutura, as part of a far-reaching distribution pact.
Univision executive vice president of distribution sales and marketing Tonia O'Connor said the company's first-time election for retransmission consent, rather than the must-carry status it had historically opted for, should come as no surprise, because its affiliate-sales group has informed distributors about the plan. As part of master negotiations, Univision also wants an extension for cable network Galavisión, and to discuss broadband opportunities tied to Univision.com and promotional partnerships for distributors' other services, notably telephony.
The missives will come in advance of the Oct. 1 deadline notification Univision is required to make, relative to its retransmission pursuit for 63 stations, whose contracts expire at year-end as part of the 2006-08 must-carry cycle.
After the company's 2007 upfront presentation in New York, CEO Joe Uva said the “bulk” of its station deals expire at the close of 2008 and that being connected to the fastest growing part of the U.S. population carried a $1 monthly per subscriber value.
At that level, Univision would trail only ESPN, in terms of a monthly license fee.
O'Connor wouldn't comment specifically on Univision's “bid ask.”
“We're looking for compensation for our services in one way or another. The broadcast networks have been compensated, whether paid directly for their signal or through negotiations for some other form of compensation,” she said.
Univision's affiliate team will proffer a multipronged pitch, one centering on the growing importance of the now-45 million strong Latino community and the company's connection to it, via its longstanding position as the top Spanish-language media player in the U.S.
Univision said that the Hispanic population is growing at three times the clip of the general populace, with sizable communities now established in such non-traditional markets as the Carolinas, Alabama, Arkansas and New Orleans. The group's annual buying power, totaling $900 billion today, is expected to hit the $1.2 trillion level in 2010.
O'Connor said Univision is committed to helping partners grow their businesses. For example, Univision will become the pre-eminent Hispanic programmer in the VOD space starting next year, when it offers distributors some 1,000 hours of on-demand fare annually, including full-match FIFA 2010 World Cup replays.
She notes that Univision, which has already taken a lead role in digital transition educational efforts through PSAs, shows and a series of town hall meetings, can help distributors acquire new customers during the DTV period — there are 2.8 million broadcast-only Hispanic homes.
Univision said that converting that group to pay-TV customers represents an incremental revenue opportunity of $1.5 billion annually, based on a monthly basic cable bill of just under $43.
Univision is also confident it can help distributors boost their high-speed businesses. “We're willing to experiment in the evolving digital media realm, working side-by-side with distributors,” she said, noting that Univision would consider making content available exclusively to distributors' TV and broadband customers.
