Univision Communications Third-Quarter Financials Improve, CEO Talks Streaming

Stephen Lovekin/Getty Images for Univision
Univision CEO Randy Falco

The Spanish-language media giant says the soccer World Cup added $54.1 million in incremental net advertising revenue in the period

Univision Communications on Wednesday reported improved third-quarter financials.

The Spanish-language media giant, led by CEO Randy Falco, said quarterly revenue increased 5.2 percent to $728.9 million driven by gains in TV and digital, partially offset by lower radio revenue. Earnings of $42.8 million compared with a year-ago loss of $15.9 million. Adjusted operating income before depreciation and amortization (OIBDA), another profitability metric, rose 4.4 percent to $315.1 million.

During the third quarter and nine months ended Sept. 30, 2014, the soccer World Cup contributed an estimated $54.1 million
and $174.2 million, respectively, of incremental net advertising revenue, the company said. It also contributed an estimated $3.1
million and $21.9 million of OIBDA, respectively. Estimated operating expenses associated with the World Cup were $46.6 million and $136.8 million for the

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“Our strategy of providing a Univision-branded experience to our audience everywhere continues to differentiate Univision Communications’ position in a very competitive and rapidly changing media environment," said Falco. "Today, we have 16 broadcast,
cable and digital networks that are expanding our reach and connecting us with a young, tech-savvy, and politically and economically influential audience."

He added: "Coupled with our content spanning across entertainment, sports, news and music, many of our offerings continue to attract audiences who are not only younger than our competitors, but also watch live and are frequently engaged with us across linear, digital and social platforms – and in many instances are watching Univision exclusively.”

On an earnings conference call, Falco was later asked about his take on over-the-top (OTT), or online streaming. HBO and CBS both recently announced plans for standalone online video offers. Univision earlier this year moved into original digital programming with the launch of over-the-top network The Flama, aimed at Latinos age 15-30.

"We're looking at over-the-top in an opportunistic way. It's another distribution platform that we have to look at very seriously," Falco said. "We have a unique audience that is extraordinarily loyal to Univision," and the company must ensure to "always be in front of that audience." He didn't provide specifics.

But he predicted that traditional pay TV companies would "probably move into OTT" over time. Added Falco: "Univision along with about every media company that owns content will look at that as an opportunity."

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Univision's television unit revenue increased 5.7 percent to $613.9 million in the third quarter, with OIBDA increasing 5.1 percent to $276.3 million. The company said retransmission fee revenue helped drive the growth, while its core advertising revenue was down slightly.

Management said local advertising revenue trends were stronger than national trends, but it wasn't clear if that was driven by a shift to digital ads or strategic timing and planning by marketers.

On the earnings conference call, Falco predicted "another strong year for Univision," with management predicting mid-single digit revenue growth in the current fourth quarter.

CFO Andy Hobson said on the call though that political advertising revenue for the mid-term elections will come in lower than previously hoped amid a lack of competitive races in big Hispanic markets. Political revenue could come in about $10 million below the original target, he said.

Oct. 29, 9 a.m. Updated with conference call commentary.

Email: Georg.Szalai@THR.com
Twitter: @georgszalai