Univision CFO Says Ad Market Continues To Be Weak In Q2

Univision isn’t immune from the advertising woes that other media companies have noted in their Q1 reports.

“The overall advertising market is weak” heading into the upfront sales season, CFO Francisco Lopez-Balboa told the privately held company’s investors this morning.

The Spanish language broadcaster has seen “balanced weakness” between national and local, with media networks continuing to pace down by high single digit percentages.

The combination of softening advertising plus rising programming costs and some one-time financial expenses reverberated through Univision’s Q1 report.

Net income at $58.1 million, was down 12.9% vs the period last year on revenues of $692.6 million,  up 4.9%. The rise in the top line is partly due to the acquisitions last year of Fusion and Gawker.

Company-wide ad sales in Q1 fell 7.9% — and 10.1% if you factor out political and advocacy ads.

Meanwhile programming costs are up 8%.

But subscriber fees, factoring out Fusion and Gawker, were up about 20%, the CFO says.

That’s mostly due to rate increases, including from contract renewals with Comcast and AT&T: Univision, Unimas, Univision Deportes Network, and Galavision have been “flat on our subs for the last several years,” he notes.

He says that Univision shouldn’t be affected much by the likely consolidation wave in TV stations with the FCC preparing to relax ownership caps, and Sinclair Broadcast Group agreeing this week to pay $3.9 billion for Tribune Media.

“For others its about getting bigger and bigger scale.” But Univision already reaches about 70% of the predominantly Hispanic communities.

“We have incredible scale as it is. We’ll always selectively look at things that make sense.” But the situation is different for Univision “by virtue of our coverage.”

CEO Randy Falco kicked off the conference call saying that Q1 results were “driven by robust double digit subscriber revenue increases, and we we continue to execute on our strategy of diversifying our programming pipeline and expanding our digital footprint.”