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Hemisphere Media Group, Inc. the cable TV property targeting the high growth Spanish-language television and cable networks business in the U.S. and Latin America, announced the appointment of Lucia Ballas-Traynor as EVP of Advertising Sales. (UPDATED with interview with Ms. Ballas-Traynor).

Mama's Latinas won the 2013 Portada Content Provider to Hispanic Audiences Award: Lucia Ballas-Traynor, Publisher Mamas Latinas, Marcos Baer, publisher of Portada, and Award presenter Evelyn Castro, La Prensa de Houston.
Lucia Ballas Traynor (left) won the 2013 Portada Content Provider to Hispanic Audiences Award with Marcos Baer, publisher of Portada, and Award presenter Evelyn Castro, La Prensa de Houston.

Lucia Ballas-Traynor will lead the advertising sales strategy for Hemisphere’s portfolio of networks. “I will be based in New York,” Ballas-Traynor tells Portada. She adds that she “will be traveling to Miami where we are headquartered, Puerto Rico where WAPA-TV is based as well as Latin America where we have significant distribution for Cinelatino and Pasiones.”

“I am responsible for overseeing all advertising throughout Hemisphere’s footprint, with a primary focus on U.S. Initially our focus will be on our two Nielsen-rated networks: WAPA América and Cinelatino. Both networks offer advertisers unique packaging opportunities, unmatched by any other media company, to reach underserved audiences in various environments that are appropriate for all key ad categories.”

I am responsible for overseeing all advertising throughout Hemisphere’s footprint, with a primary focus on U.S. Initially our focus will be on our two Nielsen-rated networks: WAPA América and Cinelatino.

Ballas-Traynor has more than 25 years of experience in Hispanic media, building and leading top Hispanic media brands across TV, digital, mobile, print, and live events. Most recently Ballas-Traynor was co-founder and EVP of CafeMom’s MamásLatinas, a bilingual online destination dedicated to entertaining and empowering Latina moms. Asked by Portada on how her approach is going to change now that she will be mostly selling into cable TV, Ballas Traynor responds that her sales career started at Galavision “so this role is effectively taking me back to my roots in terms of how cable TV is sold. My approach is consultative, insights-driven and content-centric regardless of the medium. Consequently, the approach is not too different from digital.”

My sales career started at Galavision so this role is effectively taking me back to my roots in terms of how cable TV is sold.

“We are thrilled to have Lucia join us,” said Alan J. Sokol, President and CEO of Hemisphere. “She has unparalleled experience and success in driving revenue in a variety of established and growing Hispanic media ventures. We’re confident that through her strong agency relationships and unbridled creativity, she’ll drive our ad sales business and put Hemisphere at the forefront of creative thinking.”

Digital Rights

Regarding Hemisphere Media’s plans on the OTT and digital streaming side, Ballas-Traynor tells Portada that Hemisphere Media owns digital rights for a “significant percentage of our content and are well-positioned to capture viewers wherever and however they choose to consume video content. Furthermore, we own an expansive library of the best Spanish-language films and other content and are continually generating new content that can be distributed digitally or licensed to over-the-top platforms.”

What: Hemisphere Media Group, Inc.  will acquire three Spanish-language cable television networks from Media World for US $ 102 million. Pasiones, Centroamerica TV and TV Dominicana will from now on be part of Hemisphere Media Group portfolio.

Why it matters:  The transaction reflects what Alan Sokol, CEO of Hemisphere Media Group told Portada last year, when Hemisphere Media Group went public, that the Hispanic cable market is still very fragmented and players such as Hemisphere Media are consolidating assets. Economies of scale in marketing, programming and distribution can be obtained through this process.

Hemisphere Media Group, Inc (“Hemisphere”), announced that its subsidiary company Hemisphere Media Holdings will acquire three Spanish-language cable television networks from Media World, which is owned by Hispanic content and service provider Imagina US.

Hispanic Cable TV
Hispanic Cable TV

The deal was closed at US $102.2 million in cash, subject to eventual post-closing adjustments. The acquisition is planned as an asset purchase and as such, expected to be funded with cash on hand. The transaction will close in the first quarter of 2014.

Together, these assets are expected to have generated approximately US $12.2 million of EBITDA in 2013.

As a result of the transaction, the networks acquired are :

•             Pasiones, dedicated to showcasing telenovelas and series and  distributed to approximately 3.8 million subscribers in the US and 7.2 million subscribers in Latin America.

•             Centroamerica TV, featuring the news, entertainment and soccer programming from Central America with over 3.3 million subscribers in the US .

•             TV Dominicana, the network featuring news, entertainment and baseball programming from the Dominican Republic, with over 2.2 million subscribers in the US.

Together, these assets are expected to have generated approximately US $12.2 million of EBITDA in 2013.

Alan Sokol is the CEO of the newly formed Hemisphere Media Group, Inc., which this spring will become the only publicly traded, U.S. Hispanic TV/cable networks and content platform. Valued at approximately $400 million, the venture between Azteca Acquisitions and InterMedia Partners is expected to go public by April and focus on acquiring content producers and niche cable networks in the U.S. and Latin America. Sokol, a former Telemundo COO, spoke to Portada about the new company –which he will lead- and how it plans to tap into the fast-growing world of cable television.

 

Alan Sokol, Hemisphere Media Group
Alan Sokol

Portada: What would you say is the number 1 goal of Hemisphere Media Group?

Alan Sokol, CEO of Hemisphere Media Group.:”The goal is to become the dominant player in ahigh growth space within Hispanic media, which we believe is the cable space. What’s happening to Hispanic cable is very similar to what was going on in the general market 20-30 years ago: You had 3 major broadcast networks that dominated viewers – and advertising. The landscape has changed dramatically and you have now more people watching cable than broadcast [TV.] In the Hispanic market, -where viewing has been traditionally dominated by Univision and Telemundo- we’re already seeing a dramatic shift. And that’s where we see the most growth, and where we want to be.”

What are the plans for expansion in Latin America?

“What’s happening in Latin America is just as exciting. And what’s happening there is that we’re already seen the explosion of many options in programming; you have cooking shows, sports, all-movie channels, weather… We see a huge opportunity in [all those] niche cable networks. In short, we are very bullish about cable networks in Latin America.”

Will Hemisphere Media Group focus on producing content or buying existing companies?

“We are going to be targeting producers of content but also will explore [acquiring] established channels, both in the U.S. Hispanic market and in Latin America that are underperforming, undercapitalized… or both. You have to invest heavily in order to see your audiences –and advertising revenue- grow.”

Do you have a cable network, or networks, already in mind?

“We are looking at a number of companies right now; nothing that can be disclosed at this moment.”

Are there plans to sell advertising across your properties?

“Of course. Once you have a bouquet of channels, you are then able to spread the cost and sell [advertising] across all of them. We are very excited about this possibility as well.”

Can we expect any changes in your current portfolio of companies, Cinelatino, WAPA-TV or WAPA America?

“For now we don’t expect any significant changes. We [Intermedia Partners] have been operating these busineses for five years and made some important investments in them. Of course this is private equity and you buy things to eventually sell them, since our investors expect to liquidate at a higher value. But in this case, there is so much unrealized value that we’re continuing to invest in them.”

InterMedia and Azteca Acquisition Corporation announced the signing of a definitive agreement under which InterMedia will merge Cinelatino and InterMedia Español Holdings, LLC, which includes WAPA America and WAPA TV (together, “WAPA”), with Azteca Acquisition Corporation, a company owned by Houston Dynamo football team owner Gabriel Brener. The  transaction is valued at approximately $400 million.

InterMedia currently owns Cinelatino with Cinema Aeropuerto, S.A. de C.V., an indirect, wholly-owned subsidiary of Grupo MVS, S.A. de C.V., and James McNamara. The new company will be called Hemisphere Media Group, Inc. (“Hemisphere”), and will be the only publicly traded, pure-play U.S. Hispanic TV/cable networks and content platform.  Hemisphere intends to apply for listing of the shares of Hemisphere Class A common stock on the NASDAQ Capital Market.

Potential Acquisition Targets and Latam Expansion

Alan J. Sokol, Senior Partner of InterMedia, who will become CEO of Hemisphere, stated in a press release that  “the combination of these two companies creates a powerful new presence in Hispanic media. Since InterMedia acquired WAPA and Cinelatino in 2007, we have dramatically increased ratings, revenue and profitability of both companies. Cinelatino has emerged as the leading Spanish-language movie channel and the #2 rated U.S. Hispanic cable network overall. WAPA TV has been the highest-rated television network in Puerto Rico for four consecutive years and WAPA America is the only network focused specifically on Puerto Ricans and other Caribbean Hispanics throughout the States. I look forward to working with our talented management teams to continue to build upon this success as we enter this new chapter.” Sokol told the Financial Times that he would not discuss potential acquisition targets but that Hemisphere was interested in Hispanic cable channels, Spanish-language content production and distribution, and expanding in Latin America.

Gabriel Brener, CEO of Azteca Acquisition Corporation, stated: “We are thrilled to be merging with and taking public these exciting, highly profitable and complementary companies, which have performed exceptionally under the operational and industry expertise of Alan Sokol and his teams. Hemisphere will meet the growing media demands of Hispanic consumers.”

Peter Kern, Managing Partner of InterMedia, said, “We are delighted to be partnering with Gabriel Brener to combine these premier Spanish-language assets under one roof. With the U.S. Hispanic population and its buying power continuing to grow at exceptional rates, Hemisphere is a unique platform positioned to succeed in the most dynamic market in media and represents the only way for the public to invest in a pure-play Hispanic TV/cable network business.”

Following the completion of the business combination, Peter Kern, Managing Partner of InterMedia, will serve as Chairman of Hemisphere Media Group. Mr. Kern has over 20 years of experience investing in, advising and operating a variety of large and small media companies. Mr. Sokol, the former COO of Telemundo, who has over 18 years of experience in the television and motion picture industries as an operator, advisor and investor, will serve as Chief Executive Officer of Hemisphere Media Group. Craig Fischer, who worked closely with Mr. Sokol at InterMedia in overseeing these companies, will serve as Hemisphere Media Group’s Chief Financial Officer. Messr. Brener and Sokol will become Directors of the new company.

Current Azteca shareholders will own about 27 per cent of Hemisphere on the deal’s completion, which is expected by April 6, with one vote per share, while InterMedia and other investors in Cinelatino will own about 73 per cent with 10 votes per share.