Reading L.A.--en Espanol: Tribune Co,'s Hoy faces uphill climb in challenge to dominant La Opinion.

THE bright blue newspaper boxes outside supermarkets, doughnut shops and bus stops in East Los Angeles signal that a battle has been joined for the hearts, minds and ad dollars of L.A.'s Spanish-speaking majority.

In launching the Los Angeles version of its Spanish-language newspaper, Hoy, Tribune Co. is going after the 77-year reign of La Opinion, the widest read Spanish-language daily in the nation.

Hoy is being rolled out with a multimillion-dollar war chest, funded partially with the proceeds from Tribune's $20 million sale earlier this year of the 50 percent interest in La Opinion it inherited when it bought Times Mirror Co.

By last week, Tribune, which also owns the Los Angeles Times, had installed nearly half of its planned 6,000 Hoy boxes and the paper was being sold in more than 8,600 retail outlets.

"Not a bad start," said Louis Sito, Hoy's publisher and Tribune's vice president in charge of Hispanic media.

"In the next two to three months, we'll have all of the boxes installed," he said. "The first day was a little rough, because we were so new. The second day through the end of the first week, we went to press on time. We're doing very well."

Still, Hoy faces a challenging time cracking La Opinion's stranglehold on the Spanish-language newspaper market--a point underscored last week by a random sample of small business owners in East Los Angeles.

"We sell sometimes 20 La Opinions a day. We sold two or three Hoys (the first week), but then we didn't get any for several days. They won't last because they don't sell," said Paul Park, manager of the Whittier Market in East Los Angeles.

"We're not really selling any," echoed Jenny Torres, a clerk at Mercado Mexico in the same neighborhood. She, too, said she regularly sells several copies of rival La Opinion.

Money flows

At stake for the upstart Hoy and the venerable La Opinion is a share of the $517.6 million spent in L.A. last year in Hispanic media--more than double the $239.7 million spent in the next closest city, Miami.

Hispanic ad dollars spent in Los Angeles-based newspapers were estimated at $86.2 million in 2003, with growth expected to run at a 9 percent clip through 2005.

"We are not sitting back with our arms crossed," said Monica Lozano, publisher and chief executive of La Opinion. "We know their ad rates, and this will be a very expensive endeavor for them."

On the day Hoy launched in L.A., La Opinion launched a $750,000 billboard, radio, bus bench and TV advertising campaign to reinforce the newspaper's roots and editorial tradition.

The first ad in the campaign, created by La Agenda de Orei & Asociados of Los Angeles, shows a Border Patrol agent and Spanish terms that might be used to describe him, such as "official," "employee," "traitor," "lifesaver," and "obstacle."

The ad is tied to an eight-part series of articles on border crossings that began March 1.

Even with the so-called relaunch of La Opinion, Hoy executives claim that their five-day a week tabloid has outstripped circulation and advertising gains reported by Hoy versions launched during their first weeks of publication in New York and Chicago.

La Opinion reported daily circulation of 124,692 as of Sept. 30, 2003, according to the latest six-month audited figures provided by the Audit Bureau of Circulations. Lozano said that during the week of Feb. 22, paid circulation averaged 140,205.

Initially, Hoy is publishing 200,000 copies a day. Roughly a quarter of the copies are given away by hawkers in downtown street corners, Sito said.

Different approaches

To fund the buyout of its partner, La Opinion turned to CPK Media Holdings, an investment group led by Clarity Partners, BMO Halyard Partners, ACON Investments and Knight Paton Media. At the same time, it struck a deal with El Diario/La Prensa, New York's oldest Spanish-language daily, to form Impremedia LLC in an attempt to form a national advertising platform to help it compete with the deep pockets of Tribune.

The two groups are taking differing tacks as they seek to carve a greater share of the market.

Hoy's model is to create a single brand across several markets, incorporating news from Spanish-speaking nations other than just Mexico. It adds local content--such as a story it broke its first week, about an overcrowded local El Salvadoran consulate processing passports and other documents in a fast-food restaurant.

"As a result of that story, the El Salvadoran government made changes in the way it processes its customers, like shutting down its operations (in the restaurant) and vowing to open a new office to handle the volume of business," said Juan Arango, general manager and senior vice president with Hoy.

La Opinion Editor Gerardo Lopez said the story wasn't followed.

"Our reader is someone with roots in our country, 10 to 12 years, and is interested in things going on here, in Los Angeles, the state and United States," Lopez said.

Yet another significant difference is that Hoy's classified ads are in English, La Opinion's in Spanish.

Felix Gutierrez, a visiting professor with the University of Southern California's Annenberg School for Communication, said that competition between Hoy and La Opinion would be positive for increasing readership and circulation of both.

"I just hope the Tribune doesn't get cold feet. If it really cares about the Hispanic community, then they'll be here for the long haul," Gutierrez said.

He pointed to front-page remarks in Hoy's debut issue in which Sito called L.A. the "largest Hispanic market" in the United States.

"If he sees it as a market, Hoy may not be around here long. This isn't just a place to peddle a paper and sell advertising. You come here to connect with all aspects of our lives," said Gutierrez. "I'11 wait and see."

James C. Goss, media analyst with Barrington Research & Associates Inc. in Chicago, believes the Los Angeles area market is large enough to support two major Spanish-language newspapers fighting for ad dollars.

"Certainly, Hoy would face a challenge from an entrenched competitor," Goss said. But Tribune knows the market well as a result of its partnership with the Lozanos. They established Hoy with a franchise in New York and have been successful so far in Chicago, so they must feel in analyzing the market in Los Angeles that there are opportunities without having management issues."

Tribune is keeping its expenses down. It has piggybacked on an infrastructure of trucks and distribution channels already in place with the Times. That has allowed it an ambitious rollout over four geographic zones in Orange County and Long Beach, San Gabriel and Inland Valley, San Fernando Valley and Los Angeles, according to Sito.

The idea for the zones didn't come easy. It developed after Sito visited L.A. last summer with Arango and other Tribune and Hoy executives. They rented a luxury car and began a frantic bumper-to-bumper drive over Southern California's crowded freeway system.

"It was the most painful trip I ever did. The distances of how many miles and hours we drove was amazing," Arango said.

Sito concurred. "L.A. just blew my mind. I had no idea of how to get anywhere if we didn't have someone to drive."

Language Barrier

Tribunes Hoy is attempting to take market share from entrenched paper La Opinion.

HOY

Owner: Tribune Co.

Founded: 1998

Circulation: 200,000 *

Readership Target: Mexican-Americans, Puerto Ricans, Central and South Americans

Employees: 31 **

Cover Price: 25 cents

LA OPINION

Owner: Lozano Family and CPK Media Holdings

Founded: 1926

Circulation: 124,692 ***

Readership Target: Mexican-Americans

Employees: 450

Cover Price: 25 cents

* Unaudited, printed copies daily. ** Los Angeles only. *** Audited