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COPYRIGHT 2001 The Miami Herald
Apr. 30--The launch of Univision's music label last week marks the latest step in the Hispanic media giant's bid to become a fully integrated media company, triggering speculation that the radio market is next. With Univision's formidable weight behind it, and former EMI Latin president Jose Behar at the helm, the new label seems poised for success.
But previous mergers between television companies and record labels show mixed results. And though Wall Street expected the announcement, cheering slightly at the news, Univision's recent aggressive growth, notably the December purchase of USA Networks for $1.1 billion, has some investors wondering whether Univision is stretching itself too thin.
"Music is a logical growth area for them in terms of branching out. It's a piece of the puzzle they're trying to build," said Peter Lerner, an analyst with Arnhold & S. Bleichroeder. "But their acquisition of USA Network stations is what concerns investors most. They're very under-leveraged. Getting the music side off the ground is the least of their problems."
In addition to 19 broadcast stations in the United States and 1,100 cable and broadcast affiliates, watched by 80 percent of the nation's 35 million Hispanics, Univision owns Galavision, the nation's premier Spanish-language cable network; the 13 USA Network stations; an Internet site; and a fledgling movie production unit.
The synergy between Univision's music label and its TV properties not only gives the company unrivaled reach into the fastest-growing segment of the U.S. population, but overnight makes Univision a major player in the nation's $608 million Latin music market. It also gives the company the potential to lock up artists across genres, an...
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