World Cup boosts Univision financials

Soccer event boosts revenue and even profit in Q2

NEW YORK -- Spanish-language media giant Univision Communications on Thursday reported boosts in both profit and particularly revenue thanks to the recently-concluded soccer World Cup.

The company swung to a second-quarter profit as a 23% revenue increase and lower impairment losses outweighed higher operating expenses.
Univision's revenue rose to $639.8 million, while adjusted operating income before depreciation and amortization (OIBDA) increased 20% to $272 million.

The World Cup contributed an estimated $73.6 million in incremental revenue for Univision, while its direct expenses in the quarter amounted to $69.7 million. That meant the Cup produced a $3.9 million profit for the company in the second quarter.

President and CEO Joe Uva lauded the Cup for bringing in "all-time record numbers in viewership and visits to our interactive properties."

In a conference call Thursday, management also said Univision is nearly done with upfront TV advertising sales and is pacing ahead of last year.

The Spanish-language media firm further said it is set to finish the July sweeps period as the no. 1 network in primetime in the 18-34 age demo for the first time, beating out all other broadcast and cable competitors - English or Spanish. Among viewers 18-49, it said it will come in third behind Fox and ABC.

The World Cup in South Africa was a key event affecting the company's results in the latest period.

The event contributed incremental revenue of $74.8 million over the first half of 2010, according to the company. Excluding its impact, revenue would have been up 9% in the second quarter (rather than 23%) and 9.6% (rather than 17.6%) for the first half.

Immportantly, the World Cup, which extended into the third quarter, also helped Univision's bottom line at least until mid-year when looking at direct revenue and operating expenses related to it. On that basis, it contributed $4.9 million in OIBDA for the first half.

OIBDA would have been up only 18.3% for the second quarter when excluding those direct Cup effects (instead of 20% when including them). And for the first half of the year, OIBDA excluding direct Cup effects was up 17.6% instead of 18.9% when including them.

Univision has also lauded the World Cup as a key branding event and revenue generator, potentially adding new longer-term advertisers to its mix.

"We have made significant strides both compared to last year and the previous quarter," said  Uva. "In the second quarter, the 2010 FIFA World Cup was without a doubt a tremendous highlight for us and was our most successful World Cup to date."

Management also told Wall Street folks on Thursday's call that ad market growth momentum continues in the current third quarter. Political ad revenue is expected to pick up as this fall's election nears, but executives cautioned that 2010 political revenue may not match results from 2008.
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