A New Era for Hispanic Newspapers in U.S.

By: Mark Fitzgerald NEWS ANALYSIS

Updated at 4:30 p.m. Eastern Standard Time, Oct. 20

Last Thursday's announcement that the Lozano family wants to buy back the 50% stake Tribune Co. owns in the Los Angeles Spanish-language daily La Opini?n represents the end of an era for Hispanic newspapers. Typically for the newspaper industry, the symbolic ending arrived long after the media landscape had changed utterly.

The partnership between Lozano Enterprises and Tribune is an inheritance from the old Times Mirror Co., which the Chicago media giant bought three years ago. More broadly, though, it is a legacy of a time when marriages of convenience between Latino newspapers and big chains still made sense.

Back then -- a decade or so ago -- the mostly small, family-owned Spanish-language and bilingual newspapers needed the money and publishing professionalism that chains possessed, while the big Anglo publishing groups realized after several stumbling starts in the unfamiliar Hispanic community that they needed the entree Latino papers could provide.

None of that is true anymore. These days, Latino papers as a whole resemble La Opini?n far more than the smudgy, amateurish sheets you can still find in mostly ignored stacks in the restaurants and grocery stores of neighborhoods like Miami's Little Havana or Chicago's La Villita. Like La Opini?n, most Hispanic newspapers are as well-designed and professionally written as mainstream papers. Increasingly, Hispanic publishers no longer rely on intuition alone to grow their business, but augment their insights into the community with hard-nosed database marketing.

Perhaps the biggest sea change for Latino papers, though, is their independent access to capital. Investors are increasingly willing to sink serious money in Hispanic papers, as demonstrated this summer when separate venture capital firms acquired el diario/La Prensa, the New York City daily, and La Raza, the big Chicago weekly. What's remarkable about Lozano choosing the big global firm UBS Investment Bank as its refinancing advisor for the buyout of Tribune's La Opini?n stake is how unremarkable it is these days.

But chains, too, have changed. While it is true that the initial forays by mainstream dailies into Spanish-language papers, or, more frequently, weekly in-paper sections, were mostly unsuccessful back in the 1980s, chain publishers more recently are doing very well. Tribune's Hoy, launched four years ago from its Newsday property, has soared to a circulation of 91,156, becoming the second-biggest Spanish-language daily in the nation. For Knight Ridder in Miami, the second shot at a Spanish-language daily proved a winner: The separately sold El Nuevo Herald is the fastest-growing daily in the chain.

These successes have emboldened groups to accelerate their targeting of Latino readers. Consider how many Spanish-language papers mainstream papers have launched or announced just since Labor Day: Belo Corp. rolled out a daily in Dallas and extended a weekly into Coachella Valley around Palm Springs, Calif., and Freedom Communications started a weekly out of its Odessa (Texas) American. Knight Ridder expanded La Estrella in Fort Worth, Texas, to daily publication. Tribune started the Chicago edition of Hoy, and a few weeks later announced a Sunday TMC product is coming in November.

The reason for the break-up of the Lozanos and their Chicago corporate partner is obvious, although unstated by either side: Tribune will sooner or later -- and bet on sooner -- launch from its Los Angeles Times property an L.A. edition of Hoy that will compete directly with La Opini?n.

But La Opini?n discovered even before Tribune came along that the benefits of partnering with a chain can be less than meets the eye. Back in the late 1990s, Times Mirror Co. was desperate to pump the Times' circulation back up to previous levels, and La Opini?n was eager to take advantage of the other newspaper's distribution expertise. The dailies agreed to sell their papers together for one price. The arrangement turned out to be a good deal for the Times, which saw its circulation numbers move up rapidly, but problematic for La Opini?n. Circulation of the Spanish-language daily perked up a bit, but the logistics of distributing the much-fatter Times overwhelmed La Opini?n. There was no so significant bottom-line payoff.

By 2001, La Opini?n's family managers decided they were better off without Times Mirror's help -- just as they calculate now that their best bet for the future is independence from Tribune.