Future is Hoy for La Opinion: L.A.'s Spanish-language daily expecting new rival from Tribune Co.

The ink is not yet dry on its divorce from Tribune Co., but Spanish-language La Opinion is already making plans to square off against its soon-to-be-ex.

Tribune is widely expected to launch the Los Angeles version of its Spanish-language newspaper, Hoy, perhaps as soon as early next year.

"It just makes sense as part of a national strategy to roll out in Los Angeles, and probably sooner than later," said Jose Lozano, publisher and chief executive of La Opinion, which was founded in 1926. "Presumably they will come out with a big marketing campaign, so we need to be prepared. It's going to be a big challenge for us, but one that we are up to."

Louis Sito, publisher of Hoy and vice president of Tribune publishing, said no decision had been made about whether to launch in L.A., but he acknowledged that the Chicago-based parent of the Los Angeles Times has its eye on the area.

"Tribune Co. is looking at all the markets where we have general market newspapers," Sito said. "Los Angeles being the No. 1 Hispanic market in the country is obviously in our sights. It's a very attractive market."

With a daily circulation of 124,692 as of Sept. 30, according to the Audit Bureau of Circulations, La Opinion remains the widest-read Spanish-language daily in the nation. But the relatively new Hoy has been flexing its muscles. Times Mirror Co.'s Newsday launched the colorful tabloid in New York in 1999, and it became a Tribune property as part of its acquisition of Times Mirror the following year.

In four years, Hoy, with daily audited circulation of 93,902 as of Sept. 30, has overtaken New York's other major Spanish-language daily, El Diario/La Prensa. The September figures represent a 16.5 percent increase from the year earlier.

In September, Tribune converted Exito!, its Spanish weekly in Chicago, into a daily under the Hoy moniker.

Addressing a market

The U.S. Spanish-language newspaper market traditionally has been served by individually owned publications. But that began to change in recent years with larger media companies entering the market.

Fernando Espuelas, chief executive of Voy, which produces English-language television programming for a Hispanic audience, said the 2000 Census was a wake-up call for media companies. The Census revealed that with more than 35 million people of Hispanic descent living in the U.S., Latinos had become the nation's largest minority group.

"Non-Hispanics suddenly realized there were a lot of Hispanics in the country and that represented an opportunity," Espuelas said. "The Spanish market has evolved from being a niche market to being at the core of a lot of companies' growth strategy."

That has been true for Tribune, which two years ago started a Spanish-language weekly version of its Orlando (Fla.) Sentinel.

Other markets have seen increased competition in the Spanish-language print market. In Dallas, Belo Corp., owner of the Dallas Morning News, launched a Spanish language daily in September. In response, Knight-Ridder Inc., owner of the Fort Worth Star-Telegram, upped publication of its Dallas-area Spanish paper to five days a week from two.

Tribune has set up systems that could ease the rolling out of new editions. The New York and Chicago versions of Hoy, while highly localized in news, sports and entertainment coverage, do share stories.

The company has correspondents in four Latin American countries and offers daily coverage tailored to specific immigrant groups in the cities where it publishes. For example, Chicago has a much higher percentage of Hispanics of Mexican heritage than New York so that paper carries more news of Mexico, Sito said.

And Tribune's advertising sales staffs can sell national advertisers, many already buying into its 13 English-language dailies, on its wide reach.

Lozano has taken note of that, forming a collective agency with several other Spanish newspapers around the country to offer one-stop shopping for national advertisers.

Parting ways

Tribune's 50 percent stake in La Opinion dates to a 1989 deal between Times Mirror and the founding Lozano family, which was seeking a cash infusion, in part because some members of the family wanted to cash out.

Jose Lozano said that while conflicts associated with having to answer to a publicly traded company made the partnership difficult from the start, the split was precipitated by Sito being more persuasive at selling his vision to Tribune brass. Another consideration was that Tribune would be the sole owner of Hoy, Lozano said.

Sito said that under terms of the partnership between Tribune and La Opinion, the Lozanos retained control of the board and ultimately the paper itself. Nevertheless, he said the split was not instigated by Tribune, but by the Lozanos.

"The Lozano family was extremely verbal about the idea that they wanted to remain in total control of how best to go about (expansion)," he said. "The idea of Hoy going in supplanting La Opinion was never in the cards."

Tribune and La Opinion agreed to a buyout deal, terms of which were not disclosed, on Oct. 9. The Lozanos have retained investment bank UBS AG in finding a new partner.

Lozano said La Opinion was eager to make a deal soon. The company has until April 1, 2004 to exercise its option with Tribune. Lozano said serious discussions were underway with potential partners, but no deal had been reached as of last week.

Lozano declined to say what would happen if potential buyers didn't reach the agreed price between Tribune and La Opinion. Sito said, "we'll cross that bridge when the option expires and they don't have the money."

La Opinion's circulation has dropped 1.2 percent in the 12 months ended Sept. 30. Lozano attributed the decline to the paper's strategy of cutting circulation from outlying regions and focusing on its core areas of Los Angeles and Orange counties. He said the paper had increased circulation substantially in those areas and has set a goal of reaching 130,000 by March 2004, about a 5 percent bump.

Lozano declined to disclose revenues but said that ad sales were running about 4 percent ahead of last year, about on par with an increase in national ad spending this year.

"Local and national retail business has been doing pretty well, but we are still being challenged on the classified side. The job market is still very soft," he said.

Despite that softness, Roberto Orci, president of M3 Alliance Consulting, which focuses on Spanish-language media, said Los Angeles could easily support two Spanish-language newspapers.

"Most of the Top 10 markets have two. Even Dallas has two, and it is much smaller than Los Angeles in terms of its Hispanic population," Orci said. "It stands to reason that with the launch in Chicago and the growth in New York that Hoy would launch in Los Angeles."

Sito said La Opinion had failed to capitalize on the most lucrative Hispanic market in the country. "They haven't grown any papers in the last 10 years," Sito said. "I'm sorry, you can't tell me that there are only 135,000 people in the L.A. market that are readers."

Liz Castells-Heard, president and chief executive of Los Angeles advertising agency Castells & Asociados, said Hoy is a much different product than La Opinion, with a different target audience and advertising base.

"La Opinion has a position and an equity in the market that no one else can claim," she said. "But the market can support several papers. (Hoy) will make La Opinion really have to step up to the plate."

Lozano said he is prepared to do just that. Starting next year, the biggest marketing push in the paper's history will begin with ads planned for broadcast, buses and billboards in a bid to appeal to more of the region's 1.2 million Hispanic households.

"Tribune has been working on its strategy for a Spanish-language presence in Los Angeles," Lozano said. "It's coming and we need to be ready."