HispanicBusiness

In the McAllen, Texas, market, one of the largest Hispanic radio markets in the country reaching both sides of the border, Border Media Partners owns seven stations – four that broadcast in English and three in Spanish. "I would submit that they are all Spanish-formatted stations," Mr. Castro says. "I think that is the wave of the future."

Meanwhile, while this year's announcements by Clear Channel and Viacom attracted headlines, both were seen as fairly tentative baby steps into the market. Clear Channel's announcement came after it sold its 26 percent share of Hispanic Broadcasting to help pay down debt. Clear Channel only committed to flipping 25 of its 1,200 stations. Observers also noted that after buying stations at a frantic rate in the 1990s, Clear Channel said it would grow its Spanish-language presence by converting stations, not buying new ones.

"We have plenty of radio stations," says Alfredo Alonso, a 15-year veteran of Spanish-language radio who was named to the newly created position of senior vice-president of Hispanic programming for Clear Channel in September. "We have a lot of radio properties under-performing." In the last two years, Clear Channel's WMAX-FM in Atlanta tried a 1980s music format and a news-talk format before switching to "Viva 105.3" earlier this year, becoming the first station flipped to Hispanic since the announcement. Mr. Alonso hopes to have seven stations converted by the end of 2004, with another 18 following in 2005.

"In my view [Clear Channel's announcement] had less to do with the Hispanic market and more to do with the poor growth rate of English radio," Mr. Castro says.

Infinity's move into Hispanic radio was also fairly conservative. It essentially traded San Francisco station KBAY-FM for a 10 percent stake in Spanish Broadcasting System, the Florida-based chain of 20 Spanish-language stations. "Obviously the largest-growing marketplace is the Hispanic market, and we felt it was essential to get into it," Viacom co-president Les Moonves told investors in October. "We are putting our toe in the water."

Analysts generally applauded the move. "It was a good way for Infinity to start," says Mr. Flynn of Kagan Research. The market was "concerned" that Viacom might go on a buying binge, diluting the stock. "It was a way to get into a growth situation in a disciplined fashion," Mr. Flynn says. But both the Clear Channel and Infinity moves were still seen as significant for Hispanic radio. "They went from saying, 'We will participate,' to 'This is how we will participate,' " he says.

Clear Channel and Infinity also signaled to the investment community that Hispanic radio would continue as a growth market. "It certainly validates our business model," says Walter Ulloa, CEO of Entravision, which now owns 53 Hispanic radio stations. "We're confident we will be able to defend our turf and grow."

Like many broadcasters, Entravision is maneuvering to create clusters of advertising muscle in different cities, usually where it also owns TV stations. Last year it sold three stations in Chicago for $29 million, but bought KBMB-FM in Sacramento for $17.4 million, where Entravision already owned three radio signals. "Emerging markets" represent the biggest growth opportunity, Mr. Ulloa says. Echoes SBS's Mr. Tanner, mid-level markets are "the next wave, no doubt. There is a huge opportunity there."

And that's where Mr. Bustos comes in – not trying to do battle in the big markets, where stations often fetch more than $150 million. "We will definitely stay away from the Top 10 markets," Mr. Bustos says. "The opportunity to create value is no longer there." But he believes he can beat the conglomerates in the smaller markets. "The big companies don't move as fast," he says. "By the time they want to move into markets that will be my exit strategy."