News Column

Q&A with CEO of Bustos Media LLC

November 9, 2007

Alex Ryshawy

Q: What is your general opinion about the trend of the U.S. Hispanic TV and Radio Broadcasting sector?

Amador Bustos: There is still a lot of potential in the Spanish broadcast sector but it is getting more crowded and competitive by the minute since the general market and publicly traded operators have discovered the benefits of addressing our market.

Q: Where do you see higher growth, in radio or TV?

AB: There is opportunity and growth potential in both Spanish-media sectors. However, the growth potential does not lie solely in radio or television. The greatest opportunity resides in working the mid-size hyper growth markets around the country.

Q: Why has Bustos Media (BM) decided to enter into the TV market after being an important radio player?

AB: The decision to go into television developed from a need and an opportunity. We had a need to cross promote our radio clusters. The opportunity came from the fact we could buy a good 150,000 Kw in-market Television station for less than an FM radio station. In each of the three markets where we have purchased TV stations—Sacramento, Salt Lake City and Milwaukee—we have bought them at a fraction of the cost of our FM radio stations.

Q: Along with cross promotion, are there any other synergies that you are discovering from owning both radio and TV properties in the same markets?

AB: The reduced cost of creating interesting local TV programming with radio personalities and the artists who come to the radio stations for interviews has been a pleasant surprise. The on-air radio personalities are energized to have the opportunities to exhibit their talents on TV.

Q: Why did you choose to affiliate with Azteca America (AA) in TV?

AB: To see the future of Spanish-language television in the U.S. we need to look at the history of Mexican television. Upon examination, we can see that since the monopoly of Televisa was broken, TV Azteca has made steady progress in gaining market share.

Q: How do you see AA's progress in the U.S. Hispanic market?

AB: Just as TV Azteca has made progress in gaining market share in Mexico, AA will continue to gain ground in the U.S. Hispanic market. Its quality of telenovelas, entertainment and sports programming—particularly soccer—is as good as any of the other competitors. It will only be a matter of time before AA becomes a force Univision and Telemundo will have to reckon with.

Q: How would you compare this progress to that of Univision and Telemundo?

AB: Azteca America has done a remarkable job building its U.S. network and achieving over 80 percent coverage of the U.S. Hispanic population in fewer than 10 years. AA would have gained more ground sooner if it hadn't had a faulty start with its initial partnerships.

Q: What has been the major challenge in building your radio network?

AB: Fortunately for Bustos Media, access to capital has not been a problem. Our biggest challenge has been, and continues to be, access to good stations at a reasonable price.

Q: Are you now benefiting from any economies of scale?

AB: Yes, we have realized important synergies in those markets where we have a strong radio and TV cluster. The savings have come from the lower cost of managing and operating as a group.

Q: What challenges do you expect to encounter in the TV market?

AB: The biggest challenge facing our TV properties is gaining cable and satellite carriage. It is also a task to break the misconception that Low Powered Television stations are somehow less desirable even though they may have similar cable carriage as the full power stations.

Q: You have historically concentrated your radio properties in the West and Northwestern portions of the U.S. Do you ever anticipate expanding to other geographic regions of the country?

AB: We continue to explore our entrance into other hyper growth midsize markets that need early consolidation. In 2008 we hope to begin another round of acquisitions, which will keep our company at the forefront as an independent Spanish-language broadcast operator.

Q: Do you consider that adding local flavor to the programming attracts more audience share to the networks?

AB: A sprinkling of local programming will give the entire station relevance and the distinction that will allow us to sell at premium rates.

Q: What is Bustos Media doing in radio and TV in this regard?

AB: We are taking advantage of having well-known singers and bands visit our radio studios. Once they conclude their interviews on the radio, we lead them to the TV studio for the recording of TV promos and interviews. Those interviews are subsequently broadcast as part of our local entertainment shows.

Q: How do you perceive the positioning of Bustos Media and Azteca America in the U.S. Hispanic Market?

AB: When we compare ourselves to the giants in our media sectors, we are clearly the underdogs. We use the knowledge of our third-rank position as motivation to create value with every step we take.

Q: What are your expectations of your company's performance for 2007-2008?

AB: In these tough revenue times for all broadcasters we are proud to say that we have continued to pace at double-digit growth in "same store" revenue; as well as cash flow.

Q: What is Bustos Media's current TV and Radio coverage of the U.S. Hispanic market?

AB: As a percentage of the national market, our footprint is still modest because we are absent from the mega Hispanic metro areas. However, with our current collection of 25 owned and operated radio stations plus our more than 40 affiliates we are approaching the 50 percent national coverage mark.

Q: What is the plan to increase the network coverage in Radio and TV?

AB: The plan is simple: continue to produce good results with our current properties and react quickly when good buying opportunities come our way.

Source: (c) 2007. All rights reserved.

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