Analysts Bullish on Potential ABC News-Univision Cable News Network

Diane Sawyer - ABC News headquarters in New York City - 2010
Ida Mae Astute/ABC

The English-language joint venture could tap into a growing population of Hispanics that now number more than 50 million.

Analysts are bullish on a potential 24-hour English-language cable news channel aimed at acculturated Hispanics from top-rated Spanish language broadcaster Univision and ABC News.

“It makes sense with more viewers migrating from broadcast to cable, to be able to do something like this on a national level,” says SNL Kagan senior analyst Derek Baine, adding that ABC News-parent “Disney has the leverage to get a new network launched while Univision has the brand name to pull it off.”

The companies are in serious discussions on a joint venture that would broaden the reach of both with U.S. Hispanics, say sources, though an announcement is not imminent. The proposed network would be based in Miami, where Univision already has a large studio facility. Univision has been eyeing an expansion of its news assets for some time and announced plans in March 2011 to launch a news channel. If the parties can reach an agreement, it's possible the network could be up and running in time for the 2012 presidential election, a contest where the Latino vote is increasingly critical.

ABC News has flirted with cable partnerships in the past including with CNN and more recently, Bloomberg TV. But one distinct advantage this time around is that a new venture may present fewer of the control issues that have dogged previous broadcast and cable news partnership talks including repeated aborted negotiations between CBS News and CNN.

Joint ventures, says former CNN/U.S. president Jon Klein, “are complicated and they’re always driven by the ability of both parties to get along. I think these management teams are smart enough to work past that. And the fact that it’s a bold new venture ought to give them enough momentum to get over any speed bumps that might lie in their path.”

Certainly there is plenty of upside to motivate an agreement, notably an underserved and growing bilingual population to tap into and the opportunity for both Univision and ABC News to significantly amortize news-gathering costs.

The Hispanic population grew by 43 percent between 2000 and 2010 and now number more than 50 million, according to the 2010 Census. By 2050, one in three Americans will be Hispanic. And as the Hispanic population becomes more acculturated, they are seeking English-language media that still speaks to their cultural interests.

Certainly Spanish-language media is growing right along with their constituency; Univision often bests some broadcast networks in primetime among younger viewers and was up 7 percent year-over-year in the 18-49 demographic last season, while all five broadcast nets posted declines.

Of course there is plenty of competition on cable already with the top-rated Fox News Channel, MSNBC, CNN, HLN and multiple business news networks including CNBC and Fox Business Network. But some observers still see an underserved audience in the Hispanic demo.

“This is the area to grow in to if you’re going to do cable news. It’s ripe,” adds Klein, who recently launched digital media consultancy @Media.

Indeed, Univision’s Spanish language news programs have a much younger audience profile than their English-language broadcast counterparts. The network’s evening newscast, Noticiero Univision, has a median age of 44 versus 60+ for the nightly newscasts on ABC, CBS and NBC. And they continue to add young viewers; Noticiero Univision posted double-digit year-over-year gains in January among viewers 18-34, 18-49 and 25-54.

“There is upside for ABC as well as Univision to potentially tap into some incremental new demographics because English-dominant Hispanics are possibly going to be higher income, more college educated and younger,” observes Miller Tabak media analyst David Joyce. “And advertisers like to pay up for younger consumers.”

At ABC, negotiations are being led by ABC News president Ben Sherwood, who last year sealed a deal between ABC News and Yahoo!, and Kevin Mayer, executive vp of corporate strategy and business development. Univision Networks president Cesar Conde is at the table for Spanish-language broadcaster. ABC News and Univision declined comment.

But analysts also caution that cable and satellite operators have precious little shelf space as a plethora of channels are jockeying for precious bandwidth. But they note that Disney’s strong lineup of cable channels, including sports juggernaut ESPN, should give the parties enviable leverage in those negotiations.

“Trying to get something new on is challenging,” says Joyce. “And it helps to already have good relationships with the distributors and have a lot of content that is in demand.”


Twitter: @MarisaGuthrie