Media firm grows with the Latino market
SANTA MONICA, Calif. -- You might not expect to hear Walter Ulloa discussing the Sex Pistols.
As CEO of Entravision Communications evc, a Spanish-language media company that owns 51 television and 47 radio stations across the country, Ulloa is widely associated with genres of Latin music ranging from tropical to Tejano and grupero.
Yet, he's also the person who has kept Steve Jones, guitarist for the Sex Pistols — perhaps the quintessential punk band — as the featured DJ with complete freedom over what to play or say at Entravision's 103.1 radio station in Los Angeles.
"I didn't know a lot about that format," admits Ulloa, 59, in a tidy suit and dark glasses.
But what he does know are gaps, those underserved pockets of the media market that present huge opportunities. By targeting the fast-growing but long-overlooked Latino market, Ulloa has grown Entravision into the No. 2 Spanish-language media company behind Univision. "You're looking for the hole," he says.
When Entravision took control of the relatively new Indie 103.1 in 2005, Ulloa was tempted to do what he knew and turn it into a Spanish-language station. That was until he learned that 103.1 was reaching an underserved segment of the Los Angeles market, fans of edgy alternative acts such as the Sex Pistols.
He decided to not only leave Indie's format in place, but devote additional resources to the station.
Indie 103.1 is still small: It was the 37th-most-listened-to Los Angeles station in the summer, says radio tracker Arbitron. Its average reach in the past four quarters, though, is up by a double-digit percentage in nearly every age group and time slot, according to Arbitron data compiled by Indie 103.1.
Ulloa was sticking to a strategy that has served him well and been a key to his company's success, says Marla Backer, analyst at Soleil Research Associates. Ulloa "has lots of opportunity to look for high growth, and that's where the focus is," he says.
Relishing the ignored and underappreciated portions of a population and offering them a product is a common theme running through Ulloa's life. His appreciation of the underappreciated goes beyond his career, and is evident in the decorations in the company's otherwise non-descript headquarters in an office park in Santa Monica.
The office's walls are adorned with dramatic paintings by Latino artists. Ulloa can describe how he obtained each piece. One of his favorites, by Los Angeles artist George Yepes, shows a Mexican man with arms outstretched in a Christ-like pose. Again, Ulloa's appreciation for Latino art stems from the fact that it's largely ignored by the mainstream. "I connect emotionally to Latino art," he says. "I don't think the art world appreciates it yet."
Ignored while growing up
Ulloa's infatuation with Latino media began at an early age. Growing up in the small desert town of Brawley, Calif., Ulloa found himself in a community that was 25% Latino, yet Latinos were still largely ignored by the major media. He recalls how his grandmother would watch a weak TV signal she picked up from a station near the Mexican border, roughly 30 miles away.
That's why Ulloa was energized when he joined KMEX-TV in L.A. after graduating from the University of Southern California in 1970. KMEX was one of the first TV stations to cater to the Latino market and broadcast in Spanish. "Here was a media tailored and targeted for Latinos," he says, adding that he was amazed at how mainstream media had neglected such an important slice of the U.S. population.
He had several different jobs at KMEX where he learned how to run a Spanish-language TV station. And shortly after leaving it, Ulloa and a colleague, Entravision's co-founder and current president, Philip Wilkinson, and co-founder Paul Zevnik began building various Univision affiliates with the goal to assemble a single Spanish-language company. These affiliates became the first properties in the company now known as Entravision.
As the company grew, Ulloa and his partners began buying and building more stations. These Spanish-language stations broadcast content from the Univision or TeleFutura networks, much as local stations are affiliated with the NBC or CBS networks. Ultimately, the company went public in 2000.
Like many entrepreneurs, Ulloa has overcome significant challenges. For instance, early on, while he was building stations, banks refused to extend him a loan for $3 million to create the station in Denver, fearing the Latino market couldn't support it. Tapping friends, relatives and credit cards, Ulloa financed the undertaking himself.
Quality, not just quantity
Ulloa takes pride in not only finding underserved markets, but giving them quality TV programming, says Zevnik, an Entravision board member and partner at law firm Morgan Lewis & Bockius, who has worked with Ulloa for nearly 30 years. One of Ulloa's points of pride was being given the Radio-Television News Directors Associations' First Amendment Service Award in 2004, Zevnik says. Defending quality news is "a guiding principle," Zevnik says.
Entravision is facing challenging times once again. Its stock has fallen 57% since going public and is down 1% this year. During the third quarter, the company posted a loss of $1.4 million, much steeper than the $108,000 it lost in the same quarter a year ago.
Wall Street's general misunderstanding of Latin media companies is hampering the company's stock, says David Joyce, analyst at Miller Tabak. Making things worse is the fact that Entravision stations derived a big slice of ads from financial companies, including the mortgage industry now in turmoil due to the subprime loan implosion.
Despite the naysayers, Ulloa says the future is bright for media, especially those that cater to Latinos. The U.S. Census Bureau projects the Latino population, now around 45 million, will hit 60 million by 2020 and make up nearly one-fifth of the USA's total population.
And Ulloa says appreciation for Latinos' media and art will follow suit. "The Latin presence in culture … and its influence on pop culture will only grow," he says.