The new owners of Univision may need some consoling when negotiations in the $1.44 billion Spanish-language television upfront wrap up later this month.
Negotiations are now halfway completed and media buyers and analysts say the No. 1 Spanish-language network’s main rival, Telemundo, is posting ad revenue growth of 25 percent or more over last year, seriously chipping away at Univision’s dominance.
Merrill Lynch analyst Jessica Reif Cohen thinks Univision will generate about $1.11 billion, a year-to-year increase of 10 percent. Miller Tabak analyst David Joyce earlier this summer projected an 11 percent increase, but only when not counting revenue generated last year for this summer’s World Cup soccer tournament.
Joyce expects a flat upfront for Univision when including ad spending on the quadrennial event.
Cost-per-thousands on Univision are pacing about 3 percent ahead of last year’s upfront. That is comparable to CPM increases for the English-language networks, which suffered a revenue decline of 2 percent or more in this summer’s upfront.
Telemundo is expected to pull in at least $330 million, up 25 percent, according to a June forecast from Cohen. But other analysts say the NBC Universal network may generate closer to $400 million.
Telemundo is benefiting from a combination of its own performance and uncertainty about the future of Univision.
Univision was sold in June for $12.3 billion plus debt to a group of investors led by producer Haim Saban.
Since then, Mexico-based Televisa, which owns 11.4 percent of the network and provides Univision with the bulk of its primetime programs, has threatened to unload its stake in the network. And it has ramped up a long-running threat to distribute its programs on other outlets in addition to Univision, which it’s contractually obligated to work with until 2017.
But Telemundo is also doing well this upfront because of its strong ratings.
NBC bought the No. 2 Spanish-language network in 2001 and in recent years has distinguished it from Univision by producing its own programs, where in the past it acquired series from other countries.
Telemundo’s average primetime audience is up 17.5 percent on a year-to-year basis for the period September through July, to just under 1.1 million people, on the strength of hits like the novela, or soap opera, “Decisiones.”
Univision’s audience is down 6.2 percent, to 3.4 million, according to Nielsen Media Research. Its second broadcast network, TeleFutura, is also hurting, down 14 percent, to 525,000 people.
Meanwhile, the relatively new Azteca America is up 37 percent, to a still-small 185,000 viewers.
Telemundo’s good showing this upfront isn’t entirely unexpected. Media buyers tend to funnel a disproportionate share of ad dollars to the network in part to encourage competition. The Spanish-language market has been dominated for decades by Univision and, until recently, didn’t have many competitors.
And the ad spending is welcome news for Telemundo, which this summer saw some ad revenue shift to Univision’s month-long coverage of the World Cup, an event that generated well over $100 million.
Telemundo has also been suffering ad revenue dips this year despite its growing audience.
Ad spending for the year through May was down 5.5 percent from the year-earlier period, according to TNS Media Intelligence.
During the same time, Univision was up nearly 27 percent and TeleFutura was up 11 percent.
