ABC will handle ad sales and distribution, while Univision will head production, on the 24/7 all-news network the two are forming. Planned to launch in mid-2013, Univision plans to invest $25 million in the first few years, which it believes will lead to a break-even level.
The English-language channel will target U.S. Hispanics. ABC will receive a commission on ad sales, while Univision will be reimbursed for production services.
The location of the network’s production facility has not been decided. Univision CFO Andy Hobson said Univision is negotiating with multiple states seeking the greatest incentives “for the employees that we're going to be adding to their local economies.”
The digital portion of the joint venture will launch in the fourth quarter of this year.
Hobson spoke on an earnings call Thursday, where Univision indicated in the upfront market, which isn’t entirely finished, is bringing CPM increases in the mid-single-digit range. Volume is expected to finish with a similar bump.
Univision believes it will continue to “lead the pack” as the amount of Spanish-language networks proliferate, partly because of the trust it has built with its audience. CEO Randy Falco said there have been 25 new networks in the last three years, while general-market networks are running some ads in English.
“In our view the broadening of the competitive landscape is a validation of our mission and strategy,” he said Thursday on an earnings call.
Falco said Univision has inked four carriage deals that include its new all-sports network. Dish Network, Verizon, AT&T and Cablevision have signed on.
Falco said the ABC news partnership is “yet another indication of the shift that is happening in the entire marketplace. Major brands like Disney, which owns ABC, are realizing the importance of reaching the Hispanic audience and are partnering with Univision to do so effectively.”
For the April-June quarter, Univision’s overall TV revenue -- which includes the flagship network and local stations -- increased 5% to $508 million. Stripping out a soccer tournament and political advertising, the increase was 11%.
Radio and interactive revenues were about flat.
Company-wide, OIBDA, a principal metric the company uses to evaluate its health, increased 0.3% to $253.7 million.