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Friday, March 13, 2015

Investment Strategy And Hispanic Media


What is a radio company looking for, specifically a Hispanic radio company, in 2015 to attract today's more cautious investors? Leading the panel "Investment Strategy: Hispanic Media, Wall Street & Main Street" at the Hispanic Radio Conference in Dallas Thursday was managing partner at Sugarloaf Rock Capital Drew Marcus. The first question Marcus asked the panel dealt with capital, capital markets, and what kind of capital is available to Hispanic markets.

Blackstar Chairman/President/CEO John Oxendine highlighted tech and Hispanic buying power. "I've only dealt with small and medium operators," he said. "In the last five to 10 years we've seen a lot of consolidation. There is a certain magic that Spanish broadcasters have. We have a population, and, like the black population, it is very large." Oxendine continued, "Latinos have buying power in the $1 trillion range. That's pretty encouraging. What does that mean in regard to going into business? For us to be successful, we are going to have to get involved with the new tech, everything streamed, everything mobile, and create partnerships with folks that do that."

President and CEO of YouPlus Media Jeff Hinson noted, "The pace of change is increasing. The life cycle of companies is really shortening. Almost all conversations are more on centering strategy on digital. Broadcast and Spanish radio views the broadcast tower as a component of the value to bring advertisers and communities in on."

Hinson continued, "If you think about radio down two and a half, if you're going to buy, you have to buy the right multiple. Unless your able to redefine your model, that's where the business growth is."

The FCC came into focus from more than one of the panelists, stressing the importance of minority ownership and the FCC's role in encouraging that growth. Access Communications CEO Chesley Maddox-Dorsey said, "Diversity in media is still an FCC goal. Minority voices are important, and the best way to do that is to increase minority ownership. But access to capital is still a problem. We as Hispanic broadcasters don't have the same access to capital as everyone else does. I'm a big believer of increasing Hispanic ownership in broadcasting. The stations that have grown the best are the ones that have targeted the Latino population. We've got the talent, the product, now we need the capital."

Hinson said that syndication, distribution, and new media are extremely important in the Hispanic media market. He noted, "Concentrate on distribution, and look at new media to get your product across as many platforms. Focus on the talent, and bring the best talent to stations, with local relevance [being] extremely important. Your sales department needs to understand the local market too. Entravision is syndicating. We have to value our product. We have to make sure we value them, and value them properly. The most important thing to do is collect good people to operate as efficiently as possible."

John Oxendine went on to say, "Looking at the population trends and business models going forward, [the] Spanish population has more going for it than anything else. If you look in the environment we live in today, it's about convenience, mobile, apps for young people. We need companies so young people can put together apps. We need relationships with telecoms, and we need to gain more experience in streaming."

Oxendine told Hispanic Radio Conference attendees,  "I'm trying to make you aware that you are the future. We need to associate with people who are doing things, to become successful."

Chesley Maddox-Dorsey agreed: "Partnerships are key. With partnerships you need less capital. Partnership is leverage. We want to be in the game. You guys have the talent and knowledge resources, but other people have the money. You're not going to do a $100 million dollar deal on your own, that's why partnerships are so important."

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