Univision to Acquire Stations in Puerto Rico

Univision Communications Inc., the nation’s largest Spanish-language media company, said Thursday that it is expanding its reach into the increasingly affluent Latino market with a toehold in Puerto Rico.

The Los Angeles-based television giant agreed to buy two independent stations in the island territory--Channel 11, WLII in San Juan, and Channel 9, WSUR in Ponce--from Raycom Media Inc., based in Montgomery, Ala. The stations reach all of Puerto Rico’s 1.3 million households.

Financial terms weren’t disclosed, but one analyst estimated the price at about $50 million.

Until now, Univision had not been a player in Puerto Rico, which has more than 30 TV stations.

“It’s a growing area, and the buying power is increasing,” said David Miller, a media and entertainment analyst with Sutro & Co. in Los Angeles. “The strength or significance of the deal is weighted toward the content side rather than the financials.”

Univision executives did not respond to an interview request Thursday. In a statement, Michael D. Wortsman, president of Univision Television Group, said the two stations are “a strong and profitable broadcast operation providing Puerto Ricans with quality entertainment, sporting events and excellent local news programming.”

Local news is the hallmark of TeleOnce, the San Juan station. The station bills itself as “the news channel of Puerto Rico,” with an edgy format and several daily news editions staffed by more than 35 reporters. TeleOnce broadcasts more than 40 hours of news programming a week, including an hour-long noon news broadcast.

A spokeswoman for Univision said the company is not planning to change the station’s format “for the time being.” She would not elaborate.

Besides the two Puerto Rican stations, Univision will acquire Raycom’s rights to its long-term affiliation agreement with WORA-TV in Mayaguez (Channel 5), and marketing agreements with WSTE in Ponce, Mayaguez, Aricibo and San Juan.

Also on Thursday, Univision said

it completed the $1.1 billion purchase of 13 stations from Barry Diller-headed USA Broadcasting Networks, including outlets in Miami, Dallas and Atlanta. As part of that deal, Univision also gained USA Broadcasting’s minority interest in stations in San Francisco, Denver, St. Louis and Washington.

Univision is expected to complete the purchase of USA’s nine remaining stations in September and January. The USA Broadcasting network will be the spine of Univision’s planned new Spanish-language network, still unnamed, scheduled for launch in January.

“They have bitten off a lot in recent months--not more than they can chew--but they have a lot on their plate,” Miller said. “Now they have to integrate this into their business model.”

Univision reaches 93% of U.S. Latino households with 33 broadcast affiliates and 1,164 cable affiliates.

Shares of Univision dropped $1.09 to close at $41.86 in New York Stock Exchange trading.