EXECUTIVE SESSION WITH RANDY FALCO

Univision Boss Wants Affils Along For Ride

The newly-minted president-CEO of the Spanish-language broadcaster says his goal is fostering the most engaged audience of all the media outlets, building on the fact that on most nights Univision beats at least one, if not more, of the English-language networks among viewers 18-49. Part of the strategy involves building strong relationships with affiliates and aiding them in offering local news.

When the Univision board in March chose not to renew the contract of president and CEO Joe Uva, it did not search far or long for a replacement. Three weeks ago, it tapped COO Randy Falco for the top job, even though Falco had been brought in by Uva just six months earlier.

Falco’s last executive post was not a particularly happy one — three years as chairman and CEO of AOL that ended in March 2009. But before that, he enjoyed a successful 30-year run at NBC and NBC Universal, topping out as president and COO of the NBC Universal Television Group.

At Univision, Falco inherits a company with 62 TV stations, 70 radio stations, two broadcast networks (Univision and TeleFutura) and eight cable networks that brings in about $2.5 billion a year in advertising revenue. The Univision broadcast network is the fifth-largest in the country. While the English-language networks continue to lose viewers, Unvision has shown ratings growth over the past several years.

Univision has been struggling with a heavy debt load taken on when it was acquired by a conglomerate of investors in 2006. It got help with that burden late last year, when Mexico’s Groupo Televisa, Univision’s principal provider of programming, invested $1.2 billion that gave it a 5% stake, a few seats on the board and some behind-the-scenes say in how the company is run.

The deal also cements the relationship between Univision and Televisa, which had been feuding in court over their programming arrangement.

In this interview with TVNewsCheck Contributing Editor John Consoli, Falco talks about his new role, the Televisa investment, cable expansion plans, aiding affiliates in providing local news and retransmission consent.

BRAND CONNECTIONS

An edited transcript:


How has your role changed since becoming the COO?

When I was chief operating officer I was responsible for all revenue-driving functions for the company, including advertising, marketing, research, business development, distribution, affiliate relations, and had oversight in that regard over all local and national TV and cable properties and radio. Now I still have all of those responsibilities, but oversight over programming has also been added to my duties.

How important a player is Televisa within Univision now that it has an extended agreement to provide novelas to the company through 2025 and has a 5%ownership stake and seats on the board following its loaning Univision $1.2 billion last fall to help the company meet a short-term debt payment?

Televisa has been a great partner for us and a big supporter of mine since I joined the company. We have regular conversations with them about our programming. They are a strategic partner of ours because they are an investor. But they are only one of six owners and they are not trying to micro-manage the company.

One of your areas of expertise from your many years at NBC and NBC Universal was advertising. Univision is spending a sizable amount of money to create internal units like client development teams and agency development teams to help bring in more advertising dollars across all your media platforms. Can you talk about this?

It’s one of the more exciting things we are doing here.The client development group works with advertising executives like chief marketing officers, while the agency development group works with media buyers and planners. They provide consulting and help execute strategic development for clients’ brands. They offer Hispanic consumer insights. They offer creative and marketing help, and they provide audience measurement data.
The main goal of these two groups is to activate new brands at Univision and to grow the ad dollar share of existing brands. In the past year they are responsible for bringing in some 150 new clients, including Microsoft, Samsung and Starbucks.

They are responsible not only for helping to grow our national network advertising, but also for local advertising for our affiliate stations. With everything they do nationally, they are trying to tie in with local ad and marketing strategies. And they talk to clients holistically across all platforms: TV, radio and online. They are the main reason we experienced sizable ad growth over last year.

I can’t take credit for starting them. They were initiated a year ago, but when I got here in January I expanded them in size by allocating dollars to fund them. We have added more people to each group and have authorized more proprietary research projects. There are more than 50 employees in this initiative and the two groups have a combined budget of between $40 million and $50 million a year. It is a sizable allocation, but it is paying great dividends for us.

Can you talk a little about the cooperation that goes on between Univision network and its affiliates?

ln general, we have a very positive relationship with our affiliates. We want our affiliates to be No. 1 in each of their markets and particularly with their local newscasts. Our head of stations and head of news talk to our affiliates on a regular basis about news and content. Whatever we can do to help, we do.

A Univision TV affiliate in Kansas recently began a nightly local newscast in Spanish, the first in the state. Is this going to spur an effort by Univision headquarters to get other affiliates to make similar moves in states with growing Hispanic populations?

Hispanic population and demographics are growing across the country, not only in California and Texas, but in all states. Our goal is to expand local news in markets where there is a demand by the Hispanic community. It’s a discussion that would start at the local station level. They would come up with a plan and come to us with it and ask us for funding. Servicing the local Hispanic community is one of our goals. If it makes sense to expand our news locally, we will do it.

Univision has made a major commitment to public service in the Hispanic community for a long time. What is your view on that?

As broadcasters, our mission and job one is to serve the community. We’ve created award-winning initiatives that we are committed to. We have our Peabody Award-winning Salud es Vida °EntÈrate! [Lead a Healthy Life, Get the Facts] campaign; Es El Momento [The Moment is Now], a multiplatform, multimillion dollar national education initiative aimed at improving academic achievement among Hispanic students; and our voter registration initiatives. Our employees have a real passion and sense of service to the Hispanic community. All of these initiatives are at the core of our mission and everyone here will continue to focus on them.

In your new role as president and CEO, you also now have oversight over programming. How do you see your mission going forward in that area?

There are three passion points among viewers of Univision: novelas, news and sports. At our upfront in May we announced we are going to launch three new cable channels targeting each of those passion points. The timetable right now is to launch a novela channel sometime in third quarter of this year, the sports network in the first quarter of 2012, and the best-case scenario for the news channel is sometime before the November 2012 presidential election. News continues to be a very important part of that three-legged stool with novelas and sports. We are going to intensify our coverage of the presidential election campaign and also make sure through our coverage that all the issues affecting Hispanics are identified, explored and explained.

Speaking of sports, Univision currently has Hispanic TV rights in the U.S. for the men’s and women’s World Cup telecasts through the 2014 Men’s Cup. Do you plan on bidding on the next series of TV rights to soccer’s most notable tournament?

We’re committed to bidding again and committed to being the home of the best soccer coverage year round for U.S. Hispanics.

What impact will the extended agreement with Televisa to provide novelas to Univision through 2025 have on the new Univsion Studios’ production of novelas and the amount of programming now supplied to Univision by Venevision?

There will be no negative impact. We are planning to produce more than 500 hours of new programming in-house over the next year. We are also going to have our new novela, news and sports cable channels down the road and we will need more programming than just the novelas that Televisa supplies to us. As far as producing our own novelas at Univision studios, in some instances, we may wind up co-producing them, but in many cases we will also produce our own individually.

What is the status of your retransmission consent deals with the cable operators? Is Univision, like the English-language broadcast networks, seeking retransmission fees from the cable operators as well as from your affiliates to cover some of the costs of the programming you are providing?

Most of our subscriber fee deals with the cable operators are long-term deals that are already in place. Most go on for several more years before they come up for renegotiation. When those deals are up, we will have discussions about retrains fees. As far as approaching our affiliates to help pay for programming costs, we have not had those discussions yet. Will we? It’s too early to tell.

Right now, you are beating all the English-language networks among viewers 18-34 on Friday nights in primetime. On most other nights you beat at least one, if not more, of the English-language networks among viewers 18-49. How long do you think it will take to pass the fourth ranked English-language network [currently NBC] in 18-49 and in total primetime viewers?

Well, we’re growing our audience each year while the other networks continue to decline. And the Hispanic population is the fastest growing segment. In the past few weeks during the summer, we were No. 1 among all networks in 18-34 viewers. And our viewers are also more engaged across all platforms, not only on television, but also online and with mobile. Our goal is to have the most engaged audience of all the media outlets. But how long that will take, I don’t know. We are going to keep working at it.


Comments (1)

Leave a Reply

Sean Lubens says:

July 18, 2011 at 10:02 am

Televisa is not nor will it ever be a passive investor/partner in the Univision relationship. That being the case, business will be conducted with that relationship being of paramount importance, the debt service depends on increasing the share of advertising and promotion budgets. The Televisa product is vital to that end, the institutions that hold Univision’s paper understand and will support management as long as their commitment to achieving that goal is #1, personnel may change but the goal will not, so Televisa is central to Univision’s success no matter how many hours of programming are produced or co-produced in the USA.


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