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JUNE 27, 2005
Prisa Wants To Play Conquistador The Madrid media group is making a risky move across the Atlantic Spain's Grupo Prisa has gotten too big for its britches. Its newspaper El País is the country's most widely read daily, while Cadena SER, its chain of 400 radio stations, commands an audience share of nearly 50%. The Madrid media company owns specialty magazines, several television stations, and a leading publishing house. It's also in the movie biz. One of the many hits it has bankrolled was The Sea Inside, winner of the 2005 Oscar for best foreign-language film. Prisa's grip on Spanish media is so tight that competitors have tried to clip its wings by challenging in court its dominant position in radio and pay TV, though without success. So what's an ambitious media magnate like Juan Luís Cebrián to do? Since 2000, Prisa's chief executive has been patiently stitching together the world's first pan-American radio network, consisting of 450 stations stretching from Miami to Buenos Aires. With sales of just under $66 million last year, Prisa's international radio business is still in its infancy. But Cebrián, 59, is already mulling over a plan to take all of Prisa's 1,000 Spanish-language stations public, before seeking an alliance -- or even a merger -- with a U.S. media group. "We hope to repeat the success of SER in the Americas," he says. Prisa's Latin foray is critical to Cebrián's goal of keeping Prisa's revenues growing at a steady clip. El País supplies one quarter of the group's overall $1.7 billion in revenues. But Prisa's boss expects the share of sales coming from international operations, which include a 15% stake in French daily Le Monde, to double over the next five years from today's 23%. Prisa's net profit soared 70% last year, to $126 million, on the back of a two-year restructuring effort. And the stock has rebounded sharply, to around $19, from an all-time low of $6 in 2003. ILL-FATED BET Prisa's move into Latin America carries big risks, though. The region's convulsive politics and periodic financial crises have tested the resolve of Spanish blue chips such as telecom Telefónica (TEF ), banking giant Grupo BBVA, and energy producer Endesa (ELE ), all of which rushed to invest there in the 1990s. After an ill-fated bet on a Mexican daily, Prisa has learned to tread carefully. A big chunk of the $363 million it has plowed into Latin America since 1999 has gone into radio, a medium which in that region commands vast audiences and is less subject to government meddling than newspapers or TV. Also, Cebrián has been careful in his choice of local partners. In Mexico the radio chain Radiópolis, a joint venture with the leading media company Grupo Televisa, commands almost six million listeners. "Prisa has found the best partners in every market it enters," says José Mario Alvarez de Novales, a professor at Madrid business school Instituto de Empresa. Prisa is also finding a growing audience in the U.S., home to more than 40 million Hispanics. It controls Caracol Miami, the No. 1 TV station in the city, where it also produced a Spanish-language version of the popular American TV show Law & Order that still airs on the Univisión network. For Cebrián, cracking the U.S. Hispanic market would be the crowning achievement of his long career at Prisa, which began when he was named editor-in-chief of El País in 1976. Along the way, this powerful media player has built up his share of detractors. Many contend that Prisa has benefited unfairly from its close ties to the Socialist Party, which they claim steered radio and TV licenses to the company. Prisa "has the most dominant position in its home market of any media group in Europe," says Víctor de la Serna, an executive and journalist at El Mundo, the main rival to El País. Cebrián, who has co-authored a book on politics with former Socialist Prime Minister Felipe González, says such charges are unfounded. Now he has the chance in Latin America to prove Prisa's success was no fluke.  By Carlta Vitzthum in Madrid
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