Analysis: What the 2011 results of Latin Media Companies tell us

The 2011 results of major media companies in the U.S. Hispanic and Latin American space provide interesting insights about growth in different areas of the Latin world (U.S.,Latin America and Spain). A review by Portada’s editorial team.

Warm winds from the U.S. …

By and large the U.S. economy is on a recovery path with modest growth. The TV medium, particularly in the Hispanic market is strong. Univision’s overall revenues grew by 1.2% to US$ 2,273 million in 2011. Television and radio had a relatively strong performance. Interestingly, while the digital media market is growing strongly overall, Univisions’ interactive revenues actually decreased compared to 2010. Total 2011 “Interactive Media” revenues of US $60.4 million were down by 4.1% from their  2010 total of US $63 million..

…hot winds from Latin America

Latin America continues to enjoy strong growth with overall good results coming from media companies all over the region, including Argentina’s Clarin and La Nacion media groups as well as Colombia’s Casa Editorial El Tiempo. Digital revenues in most of these media houses, while growing strongly, do not yet amount to more than 10% of overall revenues. 

Perhaps the most impressive reflection of the high growth of the Latin American media space  are DirecTV’s  results in the region. DirecTV’s Latin American revenues grew by a mindblowing 42%  to US$ 5,096 million in 2011. The very high growth rate also shows the strong growth of the Pay TV medium in Latin America, pushed by he emerging middle classes. DirecTV Latin America’s revenue already makes up 25% of total revenues of US $21,872 million. Just in the last quarter of 2011 DirecTV Latin America added 590,000 subscribers. The strong Latam Pay TV market can also be seen in Grupo Televisa’s Q4 2011 results which shows the Pay TV Network revenues segment growing by 23,3%, vs. the same quarter of 2010, to $75.6 million, On December 31, 2011, Televisa had 4,008,374 gross active Satellite TV subscribers including 157,646 commercial subscribers.

… but cold winds from Spain…

Spain shows a radically different economic picture compared to Latin America. The Spanish economy is undergoing severe stress. Due to the aftermath of the real estate bubble and heavy government spending cuts, the employment rate has risen over 20% and demand is imploding. Obviously, this is very bad news for media companies which not only are subject to the cyclical advertising revenues swings but are also undergoing through structural changes due to the advent of new technologies.

Grupo Prisa, Spain’s largest media group saw its revenues decline by 3.5% to US$ 3,541 million from US$ 3,668 million in 2010. Grupo Prisa is the owner of Union Radio, V-Me, Prisa Digital and Editorial Santillana which have an important presence in the U.S. Hispanic market and Latin America. EBITDA (Earnings before Interest Taxes, Depreciation and Ammortization) decreased by 26.7% to US $567 millon from US$ 775 million in 2010. A challenging economic environment in Spain was partially offset by a 6.7% increase in digital revenues as well as a 15.9% increase in Latin American revenues. Prisa’s Latin American bet and the shrinking Spanish advertising and media pie is reflected in the fact that Latin American revenues represented  24.3% of total revenues in 2011. International Revenues including the U.S. , Portugal and other countries account for 32% of total revenues. Prisa’s debt level is still high (US$ 4.5 billion).

Unidad Editorial, the publisher ofEl Mundo Americas and Marca, recently announced that itsrevenues decreased by 6.7% to US$ 644 million in 2011 from US$ 690 million in 2010. In terms of profitability 2011 was a bad year with losses of more than US$430 million. These losses are mostlydue to an impairment charge  to its Recoletos Group assets which were acquired by  Unidad Editorial in 2007. A more correct measure of profitability is the EBITDA (Earnings before Interest Taxes, Depreciation and Ammortization) which declined to US$ 35 million from US$ 53 million in 2010. Online revenues increased by 9.2% to US$ 50 million.  Unidad Editorial has also announced that it plans to further extend the presence of some of its brands to Latin America and the U.S. Hispanic market.


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Marcos Baer @MarcosBaer

Marcos oversees editorial and sales. He is based in Portada's NYC headquarters. Prior to launching Portada in 2003, Marcos worked in both the media and finance sectors. He occupied leading roles at the Spanish edition of The Wall Street Journal, in Spain’s newspaper Cinco Dias and at SwissRe. He is an MBA, and a CFA. Marcos is a print junkie and also loves all things digital media. He also is passionate about everything related to New York City and loves to play tennis.

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