• by David Goetzl  @dgoetzl, August 21, 2008

These were supposed to be high times for Spanish-language broadcasters. The flow chart held: advertisers were going to fully recognize the potential in targeting their audience, and then dollars would be shifted their way en masse.

After all, the new owners of Univision were banking on that calculus when they ponied up some $14 billion for the company. In January, TNS projected Spanish-language media at large would grow 7.8% this year, below only the Internet and spot TV (a sector ready to benefit from heavy political spending). Then, after the first quarter, TNS indicated its forecast might be on track, reporting Hispanic-targeted TV had risen 4.4%.

Then, about mid-May, the ad recession began to simmer. Still, it seemed the Spanish-language networks were largely recession-proof. Ratings -- particularly at Univision -- were impressive. The audience offered a high concentration of 18- to-34-year-olds, coveted by advertisers. And the Hispanic population was growing not only in size but buying power.

But in the last two weeks, a hammer has driven a nail through some of that thinking. Univision's second-quarter results showed net revenues down for its TV, radio and even Internet operations (even if sales from two prominent 2007 soccer tournaments are stripped out, there was just a tiny rise). Entravision, the leading Univision station operator, also saw TV revenue decline, albeit a less-than-drastic 3%. And appropos of recent performance or not, NBC Universal CEO Jeff Zucker flat-out said on CNBC that running Telemundo has been an uphill battle, "harder than we thought ... there's no question we need more work."

Clearly, a chief culprit appears to be the limping auto category, plummeting at Univision and Entravision by large margins.

Still, executives, while perhaps not exceedingly upbeat, are hopeful they will be able to ride out the choppy waters. Univision COO Ray Rodriguez said on a conference call: "In recessions like this in the past, what we've experienced is our revenue growth tends to go about flat, although everyone else seems to decline." Entravision CEO Walter Ulloa said even as automakers pull back, new advertisers are being signed up.

Is their muted optimism misguided?

Maybe not. If Univision indeed can keep revenues about flat through the end of the year, then the flat-is-the-new-up aphorism would apply.

Along that path, some Hispanic media experts say increasingly advertisers no longer treat the sector as a "line item" -- something that can be slashed willy-nilly during a downturn.

And two, at least in the short term, if political candidates continue to believe in the importance of winning the Hispanic vote, then spending there should provide a significant buffer through November.

So, in a sense, Hispanic-targeted broadcasters are counting on candidates to help them until the election -- and then soon thereafter with policy changes to rev up the economy. That's no different than the general market.

* * * * * * * * * *

Last week, NBC took some heat in this space for allowing John McCain to run ads attacking Barack Obama during the Olympics. The argument held that the ads contrasted so sharply with the shining moments in the Games themselves, and the feel-good spots from other advertisers, that NBC should have simply demanded both candidates avoid any negative campaigning.

It was then pointed out that, per FCC rules, a network cannot turn down ads from federal candidates based on content.

So, blame for the jarringly out-of-place negative spots goes to the McCain campaign. NBC's hands seem to have been tied.

(Obama has reportedly begun running negative ads with spot buys on local stations, perhaps during their Olympic broadcasts.)

Perhaps realizing the backlash those types of ads could elicit -- as well as the attention they could take away from other advertisers -- Fox declined to accept any political spots in the Super Bowl last February (citing a narrow FCC clause).

Smart move.