InterMedia’s Sokol: Buying Into the Puerto Rican Market
By Luis Clemens -- Multichannel News, 11/5/2006 7:00:00 PM
Alan Sokol is a senior investment partner at private equity firm InterMedia Partners, which in October agreed to purchase WAPA-TV for $130 million from LIN TV. Along with the Spanish-language independent station, InterMedia is buying the cable and satellite superstation WAPA-America as well as an interest in MTV Puerto Rico, which is currently broadcast over-the-air on the island. Sokol served as Telemundo COO from 1998 to 2003 and before that he was a senior vice president at Sony Pictures. He spoke recently with Multichannel News contributor Luis Clemens about plans for WAPA, the growth potential of the Puerto Rican market on the island and the mainland, and how the station will go about competing against Univision and Telemundo. An edited transcript follows:
MCN: Where’s the growth potential in the Puerto Rican market? Is it on the island or on the mainland?
Alan Sokol: I think it is clearly both. I think we looked at it as an engine with dual-growth potential.
First on the island itself, the television dynamic in Puerto Rico is sort of like the mainland U.S. 30 years ago. You have three significant broadcast players that take 85% of the television advertising dollars in the market with the balance being divided among a few local channels and cable and satellite. We don’t see that dynamic changing in any material way in the foreseeable future.
We feel we bought at or near the low end of the market and on favorable buying conditions.
We think the broadcast television business on the island is and will remain strong because you don’t have a lot of the factors that mitigate against broadcast that exists in the United States.
MCN: And the mainland?
AS: As far as the mainland, we feel there is an enormous growth opportunity.
They already launched a cable channel called WAPA-America, which is available on DirecTV and Comcast. And one of our primary initiatives will be to leverage the content that is being produced by WAPA in Puerto Rico to create a service in the U.S. targeting Puerto Ricans and other Hispanics of Caribbean descent.
MCN: Will this be above and beyond WAPA-America?
AS: It is unclear at this point, we haven’t yet determined what shape that is going to be. But, we are clear we will leverage WAPA-America to become a bigger and more widely distributed service.
MCN: Do you plan to keep MTV Puerto Rico up and running?
AS: It is still very young and immature. The trends are heading in the right direction in terms of the revenue and ratings. It is a good strategy because none of the broadcasters on the island really focus on targeting the youth audience in Puerto Rico. So the youth audience is available and there are advertising dollars available for that audience, so I think the idea is the right idea. But we have to see as time goes along whether we get enough traction and whether advertisers support it in a big enough way.
MCN: How do you compete against Univision and Telemundo in primetime?
AS: We think WAPA has not done much in primetime over the past few years to really distinguish themselves. Univision and Telemundo are strong competitors in primetime and the strength of their programming derives primarily from the telenovelas that their U.S. parents provide to them. WAPA historically has counter-programmed against the telenovela and that has worked reasonably well for them but I think there are things we can do to really supercharge the primetime growth at WAPA. We are going to create some new original productions that I think will be different and exciting.
MCN: Do you think the Puerto Rican audience is underserved?
AS: We want to use WAPA as an important component to reach the non-Mexican, Caribbean Hispanic audience in the U.S. Obviously, Mexican-Americans comprise the largest segment of the audience in the U.S. and understandably Telemundo and Univision target the Mexicans as their primary audience because they have to. They are national networks and have to go after the largest mass audience, but as a result we think the non-Mexican audience is largely being left out of the mix.
We think WAPA and WAPA-America gives us a great head start in forming a programming service to target that audience primarily on the East Coast.
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