SBJ/September 10-16, 2012/In Depth

Univision’s big bet

The stakes are high for Univision Deportes President Juan Carlos Rodriguez as the upstart venture makes a play for Hispanic sports viewers

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The head of America’s latest startup sports network stepped onto the patio of his Miami office, out into the thick air that lingered after a tropical storm.

“I’ve been talking too long without a cigarette,” said Juan Carlos Rodriguez, who three months ago left his job as CEO of Mexico’s premier sports network to assume a similar role at Univision, the behemoth of Spanish language media in the U.S.

What started as a retracing of Rodriguez’s unlikely path to the pinnacle of sports television in Mexico had flowed chronologically into a discussion of his plans for Univision Deportes, the 24-hour cable sports network that launched in April.

As the conversation moved outside, Rodriguez turned his attention to what makes this launch different from those that have come before it, or will come next.

Univision Deportes President Juan Carlos Rodriguez stands in the studio of the network's Miami headquarters.
Photo by: Bob Metelus
There is nothing new about a Spanish-language sports channel. ESPN Deportes and Fox Deportes (previously known as Fox Sports en Español) launched in 2004. BeIN Sport, an Al Jazeera network that broadcasts in English and Spanish, made its splashy launch last month. Time Warner Cable will include a Spanish-language station when it fires up its regional sports network in Los Angeles in October.

What makes this launch different is that it spawns from Univision, which reigns over Spanish-language media the way Coke dominates the soft drink market and Budweiser owns beer.

Univision has planted itself firmly in the prime-time ratings conversation, beating NBC in the 18-34 demo on 72 percent of nights in 2011-12. Among 18- to 49-year-olds, Univision beat NBC on 50 percent of nights, ABC on 37 percent, CBS on 32 percent and Fox on 29 percent. Among 18-to-34s, Univision has ranked no lower than second among all networks in prime time for the last 16 consecutive weeks.

Hispanic major media ad spending

Television still makes up approximately 70 percent of the total ad revenue generated by Hispanic media outlets, although spot radio and the Internet posted gains in 2011 compared to 2010.
 

U.S. advertising spending
in Hispanic media

Percent of
total spending

Source 2011 spending (000s) 2010 spending (000s) Change 2011 2010
Television          
Network $3,491 $3,307 5.5% 48.9% 48.4%
Spot $1,224 $1,316 -7.0% 17.1% 19.3%
Cable $227 $189 19.8% 3.2% 2.8%
           
Print          
Newspapers $702 $712 -1.4% 9.8% 10.4%
Magazines $365 $340 7.4% 5.1% 5.0%
           
Other $47 $30 56.7% 0.7% 0.4%
Radio $666 $598 11.3% 9.3% 8.8%
Internet $420 $336 25.0% 5.9% 4.9%
           
Total $7,140 $6,829 4.6% 100% 100%

Note: Totals have been rounded.
Sources: Advertising Age “Hispanic Fact Pack 2012,” based on data from Kantar Media, Latino Print Network, Nielsen and Ad Age DataCenter estimates

The stations of Univision’s expansive radio network rank No. 1 among Hispanics ages 18-49 in 12 of the 13 largest Hispanic markets.

All of this gives Univision Deportes a not-so-secret sauce the likes of which exist nowhere else in U.S. media. None of the major networks dominate in English the way Univision has in Spanish.

“We have the big, big, big, big U,” Rodriguez said, touching his thumbs together to form the letter that also happens to be the network’s logo. “When you see the numbers, a regular number in [Spanish] pay TV would be 200,000, at the most. When you come to us, you see 5 million. So our attractivity is the U. That’s what made this job very attractive to me. Over-the-air TV in the U.S., with the 50 years of history of Univision, makes it a very strong proposal.”

Between sips of Café Cubano at Versailles, an iconic Little Havana restaurant that is the campfire of Miami’s Cuban-American community, a soccer agent who makes his home nearby put that proposal into context.

“When someone comes from Argentina or Mexico and they don’t speak the language, they don’t know where to get
anything,” said Dario Brignole, a former IMG agent who now owns and operates the sports and entertainment marketing company Shine Entertainment. “You know who they call? They call Univision. I’m not kidding you. They call the receptionist and say, ‘My daughter is sick. Where can I get a doctor?’ Univision in Miami is so powerful, they’ve kind of become the Yellow Pages.”

Because he represents some of the leading on-air-talent in Spanish language television, as well as several premier Mexican players, Brignole deals with all the networks, and especially Univision, Telemundo and ESPN. He has a clear view of where Univision is headed with its new outlet.

“This is a long-term positioning to own sports in Spanish in North America,” Brignole said. “And I think they will be successful. When you start to create the synergy between entertainment and sports, and start pushing your sports programming on the Univision channel, that’s very powerful. Fox and ESPN don’t have that.

“Univision speaks to the family, and Univision speaks also to the futbol fan. It’s a way bigger reach than anything anybody else has.”

Leading the effort

Rodriguez got his first sports job soon after he started college, thanks to a father who owned the only Adidas distributor in Mexico. The son wasn’t taking to college life, so his father hooked him up with a friend who was the CMO of Mexico’s upcoming World Cup organizing committee.

They struck a deal. Rodriguez could work on the World Cup so long as he promised to continue in school. He offered to do whatever was asked and did it all well. He also began building a contact list that continues to serve him well today.
After college, he went to work for his father, working at his side for 13 years, until the two had a falling out over salary.

Rodriguez is placing his bets on the strength of Mexican soccer.
Photo by: Bob Metelus
With a wife and a 2-year-old at home, Rodriguez decided to launch his own business. He and a friend started a sports radio network for a large chain of stations. That went well, but when the owners sold the chain, Rodriguez’s company was left on the outside. Rather than blow up an operation that had grown to 150 employees, Rodriguez pursued and landed Mexican radio rights to the 2002 World Cup from DirecTV.

During the negotiation, DirecTV executives asked Rodriguez if he had any experience with TV production.

“I said what you say — ‘Sure, I’m a big TV guy,’” Rodriguez said, chuckling at how preposterous that claim was. “I had no idea what I was saying. I was so naive. I thought, ‘I’m the producer of whatever you want me to produce. I produced shoes and clothing for 12 years. I worked with Televisa for two years during the World Cup. I can take this.’”

Univision Deportes has invested heavily to bring its production capabilities up to date and to launch new studio shows.
Photo by: Bob Metelus
Realizing he was in over his head, Rodriguez turned to another friend, who had a wealth of TV production experience.
With his help, Rodriguez hired 30 people and took them to Japan and Korea, where they produced World Cup games for distribution in Mexico. Rodriguez and his company, Grupo Estadio, were in the TV business.

In 2005, they took another leap, spending about $6 million — almost all of it financed — to build a state-of-the-art TV studio. Before long, they were producing six hours of original programming daily, airing both in Mexico and the U.S.

Top Hispanic networks

Network television, total day

Rank Network Avg. # of Hispanic viewers
1 Univision 1.11 million
2 Telemundo 584,000
3 Fox 552,000
4 Telefutura 330,000
5 ABC 239,000
6 NBC 206,000
7 CBS 203,000
8 PBS 197,000
9 CW 195,000
10 ETV 116,000

Cable television

Rank Network Avg. # of Hispanic viewers
1 Nickelodeon 395,000
2 Disney 294,000
3 Cartoon 227,000
4 Adult Swim 153,000
5 Nick at Night 148,000
6 MTV 110,000
7 Nick Jr. 103,000
8 FX 100,000
9 USA 99,000
10 Galavision 98,000

Note: Average daily viewership among Hispanics ages 2 and up, September 2011-July 2012. Viewing data includes seven days of DVR. Other notable rankings include ESPN (No. 16), ESPNDeportes (33) and Gol TV (70)
Source: Magna Global analysis of Nielsen data

Network television, prime time

Rank Network Avg. # of Hispanic viewers
1 Univision 3.44 million
2 Telemundo 1.23 million
3 Fox 606,000
4 Telefutura 580,000
5 ABC 496,000
6 CBS 436,000
7 NBC 410,000
8 ETV 197,000
9 CW 182,000
10 Azteca América 127,000

Note: Six-month prime-time average (Monday-Sunday 7-11 p.m.) among Hispanics ages 2 and up, for the period of Dec. 26, 2011-June 24, 2012. Viewing data includes programming watched via DVR within seven days of a program’s original air date. A similar ranking of cable networks was not available as of press time.
Source: Nielsen

The company was losing money but making noise, enough so that, in 2009, Televisa bought it, making it the anchor to its own 24-hour sports network. Televisa gave Rodriguez a three-year contract to run the network, only with far greater resources than he had when he was on his own.

He was nearing the end of that term when calls started coming from headhunters in the U.S., where Univision was in the market for a new leader for its sports division.

“I thought, ‘Weird,’” Rodriguez said. “They don’t need a Mexican there. I’m a smart guy. I’m a clever guy. I’m a very entrepreneurial guy. But there are gazillions of those in the U.S. When you come from Mexico, you see the U.S. a bit like — wow.”

To Univision CEO Randy Falco, it made all the sense in the world. With Televisa, Rodriguez negotiated not only with the premier Mexican properties, but also for the Mexican rights to leading leagues worldwide, including those in the U.S. The core of Televisa’s sports offering is Mexican soccer, and the majority of the Spanish-language audience is of Mexican descent.

As the Univision Deportes senior executive producer of news, Sharon van Zwieten, puts it: “To have some Mexico in our Mexico makes us a lot better.”

Van Zwieten came to Univision to launch the network’s sports news operation in November after an ESPN stint in Singapore, where she oversaw the production of “SportsCenter” in Mandarin for Taiwan, in Cantonese for Hong Kong, in Bahasa for Malaysia, in Hindi for India and in English for Southeast Asia.

Univision’s sports department was in need of a dramatic overhaul. Until this year, its producers still were editing on tape. Van Zwieten converted them to desktop editing. She also knocked down walls — literally — creating a vast, open space of workstations where reporters, editors and hosts can collaborate.

At the end of the room, a wall of monitors allows the staff to see all the feeds that their counterparts in the control room are viewing.

Last month, Univision Deportes launched three shows: a slickly produced nightly soccer news and analysis program called “Futbol Club,” a nightly point-counterpoint show similar to ESPN’s “Around the Horn,” and a weekly boxing roundup. But the signature show remains “Contacto Deportivo” a nightly news show that ran 30 minutes at launch and now has expanded to an hour.

One of the first edicts that Rodriguez implemented was the insistence that “Contacto” — and the “Dos Minutos” updates its staff produces to run at the top of each hour, alternating between Spanish and English — differentiate itself from its competitors on ESPN and Fox by aiming squarely at the programming that it has in spades. Its order of priorities looks like this: Mexican soccer, international soccer and stories that feature Hispanic athletes in U.S. sports. That’s it. When Adrian Gonzalez is hot, you will hear about the Dodgers. When he isn’t, you might not.

“To have Juan Carlos to guide us in the best way to cover our premier property is a real advantage,” Van Zwieten said. “He has a mental Rolodex that’s bigger than any hard drive. He always knows somebody, or somebody who knows somebody. He’s lived this and breathed it.”

Focused on Mexican soccer

One of the appealing aspects of Spanish language media has been that, in a fragmented world, the audience has remained relatively clustered, especially when compared with the general market. But consider the rapidly expanding buffet of televised sports.

Along with the sports cable channels of ESPN and Fox, and now Univision and Al Jazeera, all broadcasting 24 hours a day, there are the broadcast networks — Univision, sister station Telefutura, Telemundo and Azteca América — which generate the largest audiences by airing the property watched most by Hispanics: Mexican soccer.

About 33 million of the 50.7 million U.S. Hispanics are of Mexican origin, according to 2010 census data. That’s about 65 percent. Puerto Ricans, who are the next largest group, make up about 9 percent. Cubans and Salvadorans account for about 3.5 percent each. Dominicans account for 3 percent.

In general, people from the Latin islands of the Caribbean care little for soccer, preferring baseball, but together they make up only 15 percent of the market.

“Ten years ago, Hispanic was any guy who spoke Spanish, from Tijuana to Patagonia to Spain to Africa,” Rodriguez said. “If you speak Spanish, you are Hispanic. Today, Hispanic is your age, your income and where you really come from. All things that are relevant to Mexicans are not relevant to Argentinians. The guys on the East Coast, which is more Caribbean, are different from the ones on the West Coast. This is a super dilemma.

“So we decided on Mexican soccer. Why? Because there are so many Mexicans, but also because of what Televisa puts on the table. As my grandmother used to say, ‘You have to feel very proud of your pregnancy.’ And, through Televisa, we are pregnant with rights to Mexican soccer.”

That is a trump card for Univision’s sports department, and for Univision Deportes — which as yet is not available on Time Warner, Comcast or DirecTV — as it fights for distribution. The No. 1 sports property in Spanish language television is Mexican soccer. Nothing else is close.

Through Televisa, Univision holds the rights to 12 of the 18 teams in Liga Mx, the top-flight pro league. Next year, it will add Chivas, one of the two most popular teams in the league.

Most Liga Mx clubs handle their U.S. rights as a spinoff of their Mexican rights. Those with Televisa end up on Univision, and those with the other large broadcaster in Mexico, TV Azteca, are sublicensed in the U.S. to ESPN and Fox for cable broadcast and carried over-the-air by Azteca América, a less-distributed channel that still manages relatively big numbers for its Mexican League games. When Azteca América aired the championship game in the spring — thanks to one of Azteca’s five teams making the final — it drew a network record 1.9 million viewers.

Chivas is one team that strikes its U.S. rights deals separately. Five years ago, its U.S. deal with Telemundo brought about $45 million, said a source familiar with Mexican league rights fees. Earlier this year, Univision unseated Telemundo with a deal that nearly doubled the price.

Largest spenders in U.S. Hispanic media

Rank Brand 2011 spending (000s) 2010 spending (000s) Change
1 Procter & Gamble $220,552 $197,655 11.6%
2 Dish Network $154,745 $90,430 71.1%
3 Verizon $114,613 $137,919 -16.9%
4 McDonald’s $114,164 $117,301 -2.7%
5 AT&T $110,388 $132,083 -16.4%
6 General Mills $97,023 $91,814 5.7%
7 Univision* $87,516 $119,198 -26.6%
8 Toyota $86,178 $79,947 7.8%
9 Kraft $83,675 $36,334 130.3%
10 General Motors $79,384 $102,470 -22.5%
11 L’Oreal $77,796 $50,392 54.4%
12 T-Mobile $77,442 $79,369 -2.4%
13 State Farm $73,898 $91,762 -19.5%
14 Sprint $73,173 $73,468 -0.4%
15 Ford $62,500 $36,539 71.0%
16 Wal-Mart $60,875 $65,579 -7.2%
17 DirecTV $59,766 $128,911 -53.6%
18 Fiat $58,049 $18,118 220.4%
19 Comcast $56,321 $51,989 8.3%
20 Sears $55,185 $53,916 2.4%

* Excludes spending for Univision prepaid MasterCard
Source: Advertising Age “Hispanic Fact Pack 2012,” based on data from Kantar Media

Univision will air about 200 games from the Liga Mx this year; about 55 on the mother channel and 145 on Univision Deportes and a second UDX channel exclusive to Dish Network.

“The programming they have really does make them the primary location for Mexican League soccer,” said Kathy Carter, president of Soccer United Marketing, the MLS subsidiary that handles the rights to Chivas and the Mexican national team in the U.S. “Nobody can dispute that.”

This summer, the Mexican League resurrected a tournament called Copa Mx, which includes teams from both the first and second divisions. Univision and ESPN Deportes are both airing games. It’s the sort of event Univision might not have been able to find room for were it not for the sports network.

“We’ve always had this plethora of marquee events,” said Eric Conrad, Univision’s vice president of sports, who joined the network last April from ESPN Deportes. “And because of the valuable real estate of these novellas and content we share with Televisa, you can’t necessarily have a two-hour pregame show that some of these games may merit. We knew our audience wanted more. The network was the perfect answer.”

For an Aug. 15 match between Mexico and the United States, Univision Deportes led in with six hours of pregame programming, including a two-hour show set live at Estadio Azteca, which is home to the Mexican national team and Televisa-owned Club América.

It will be interesting to see how ESPN and Fox will respond to Univision’s entry into sports cable. They’ve already had to deal with the power of Univision and Telemundo to deliver the big events on their broader networks. Now, Univision can dig even deeper.

While it cannot offer the menu of games from Mexico that Univision can, ESPN has found it can draw strong audiences for other soccer.

Last month, ESPN Deportes registered Spanish cable’s second and third highest-rated sports telecasts of the year with its airing of Supercopa matches between rivals Barcelona and Real Madrid. The first match drew 686,000 Hispanic viewers; the second 905,000.

ESPN Deportes’ most-watched telecast in its history also came from Europe. The Italy vs. Spain UEFA final in July delivered 1.1 million Hispanic viewers.

“There was a time when we launched our network that it seemed that Mexican soccer was the only thing that was relevant to the viewing audience,” said Lino Garcia, general manager of ESPN Deportes. “People would have thought Mexican soccer was the end all be all. It’s still tremendously important. It does well. But the soccer fan, including the Mexican soccer fan, is sophisticated. They know where the best soccer in the world is played. While they may follow their team from wherever they’re from in Mexico, there is a reverence for European soccer. It does better than anything else [that ESPN Deportes airs].”

Univision’s most-watched broadcasts of all time

Rank Program

Date

Viewers (000s)

1

Destilando Amor

Mon., Dec. 3, 2007

8,980

2

FIFA World Cup 2010 (Argentina-Mexico)

Sun., June 27, 2010 (2 p.m.)

8,716

3

FIFA World Cup 2010 (Holland-Spain)

Sun., July 11, 2010 (2 p.m.)

8,299

4

CONCACAF Gold Cup 2011 (USA-Mexico)

Sat., June 25, 2011

7,981

5

Rubi

Mon., March 7, 2005

7,755

Univision’s most-watched sports telecasts of all time

Rank Program

Date

Viewers (000s)

1

FIFA World Cup 2010 (Argentina-Mexico)

Sun., June 27, 2010 (2 p.m.)

8,716

2

FIFA World Cup 2010 (Holland-Spain)

Sun., July 11, 2010 (2 p.m.)

8,299

3

CONCACAF Gold Cup 2011 (USA-Mexico)

Sat., June 25, 2011

7,981

4

CONCACAF Gold Cup 2011 (Honduras-Mexico)

Wed., June 22, 2011

7,115

5

Copa America 2007 (Mexico-Argentina)

Wed., July 11, 2007

6,911

Notes: All broadcasts began in prime time, ET, unless noted. Impressions based on Live+Same Day data.
Source: Nielsen

Over the summer, Fox Deportes made several programming moves that indicate where it is headed, announcing plans to air Spanish-language telecasts of NASCAR and college football. Part of it is simply Fox Deportes making use of the all-language league rights held by Fox Sports, as the network long has with its MLB rights. The difference between doing that in baseball or boxing or even UFC, as it has in the past, and doing it in racing and college football is that there is an acknowledged pool of baseball, boxing and UFC fans who prefer to watch TV in Spanish when the content is relevant. That’s less likely to be the case for NASCAR and college football.

The general manager of Fox Deportes, Vincent Cordero, said the moves are reflective of what the channel wants to be and where it fits into Fox’s broader play for the Hispanic viewer who is comfortable in both languages and lives with a foot in each culture.

“Historically, when you thought about a Spanish sports network, the first thing that came to mind was soccer, and mostly Mexican soccer,” Cordero said. “I’m not saying that’s no longer important. What I’m saying is, we’re trying to maintain our leadership as a premium soccer network, but also to expand the core brand to become the No. 1 U.S. Latino sports brand. So we have to expand our leadership beyond soccer, into combat or racing or even college football.”

Mostly, this is a play to expose those sports to relative newcomers to the U.S. — a priority for NASCAR — and perhaps also to tap into the Hispanic marketing budgets of some of the brands that sponsor those sports.

“All the leagues are looking for ways to do a better job of reaching this audience,” Rodriguez said. “So if we invite the NFL to jump into our pool, it’s because we have 5 million people that watch the Mexican national team that might be interested in their product.

“Putting an ad in a soap opera about watching an NFL game? That’s the best advertising for Hispanics that they have ever dreamed of.”

The challenges ahead

El hombre propone y Dios dispone.

A popular Mexican folk saying, translated it means “man proposes and God disposes.” You may make your plans, but the outcome is sometimes beyond your control.

In October, six months before Univision launched Deportes, it was outbid on the jewel of Spanish-language programming by its less-watched rival, Comcast-owned Telemundo. Univision has aired every World Cup since 1978, and it will do so again in 2014. It plans to blanket the tournament, and the road to it, with coverage across all its networks, especially Univision Deportes. But after that, the next two World Cups — 2018 and 2022 — belong to Telemundo, which secured the run of Spanish-language rights for about $600 million, nearly doubling the $325 million that Univision paid in its previous FIFA deal.

“We doubled down and invested where we needed to invest,” said Jorge Hidalgo, executive vice president of network sports for Telemundo. “Between the World Cup and the Olympic Games, those are the two biggest events on the planet. And we’ve got them both.”

Clearly, Univision did not expect it would be losing World Cup rights and the other FIFA rights that go with it when it proposed a cable sports network. But, Rodriguez said, the network likely would have launched either way, since the day-to-day machinations of Mexican soccer are at its core, and it intends to maintain a firm hold on those rights.

Asked about his plans for programming sports on the network when it lacks the World Cup, Rodriguez waves a hand dismissively. “That’s a long way away,” he said. But his competitive nature won’t let him leave it at that. “Beware, Telemundo,” he said, “because I know exactly what we’re going to do.”

He wouldn’t be specific, other than to point out that through its many platforms and because of its alignment with the Mexican national team Univision might be able to create a package alongside the World Cup that could compete strongly for sponsor dollars. Univision will not have the games, but outside of those windows, it could offer a compelling choice.

“The Hispanic viewer here, for years, used to eat whatever we served,” Rodriguez said. “Now we have to serve what it is they want to eat.”
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