June 3, 2022
Latina activists and entrepreneurs Jess Morales Rocketto and Stephanie Valencia have raised $80 million to launch a new Hispanic media company called the Latino Media Network.
Why it matters: It's one of the largest capital raises for a Latina-owned and operated startup in the U.S.
- "It's pretty audacious for people like us to be doing something this big," Morales Rocketto said in an interview. "Steph and I have been raising money for a long time, but this is orders of magnitude bigger than what we've ever done."
Driving the news: With the capital, the duo has acquired 18 Hispanic radio stations across 10 markets from TelevisaUnivision.
- The deal, valued at $60 million, is one of the largest single acquisitions of radio stations by a Latino-owned and operated company.
- "Those 10 markets are some of the most dense markets in the country," Valencia said, referring to markets like Los Angeles, New York, Miami, Houston, Chicago, Dallas, San Antonio, McAllen, Fresno and Las Vegas. "They basically give us access to one-third of the Hispanic population in this country."
- Most of the acquired stations are primarily Spanish-language and a few are bilingual. Some of the AM stations are talk radio, while others are sports broadcasting affiliates of major pro sports teams. Most of the FM stations are music-focused for now.
- "This decision follows a formal process, in which TelevisaUnivision met with dozens of potential buyers," TelevisaUnivision said in a statement.
The startup has recruited dozens of high-profile Hispanic celebrities, entrepreneurs, media figures and investors to join its cause.
- The board will include Morales Rocketto and Valencia, as well as radio entrepreneur and investor, Tom Castro and social justice activist Henry R. Muñoz III. Castro has bought and sold over 50 radio stations serving the Latino community and serves on the boards of Nielsen and Cumulus Media.
- Lakestar Finance, an investment entity affiliated with the Soros Fund Management, is leading the investment, and other individuals, including Hollywood actress and entrepreneur Eva Longoria, are also investing.
- Award-winning Univision anchor Maria Elena Salinas and Al Cardenas, former chair of the Florida Republican Party and American Conservative Union will serve as advisers.
Catch up quick: Valencia formerly served as a special assistant to former President Obama and the White House's principal deputy director of public engagement.
- Morales Rocketto has worked at various nonprofits and is an alumna of Hillary for America, the AFL-CIO, Obama for America and the Democratic National Committee.
- Asked about whether the company would have a political bent, Morales Rocketto said, "It's not about politics. We're serious about serving the community, and about free speech and free expression."
- "Of course Stephanie and I are who we are, we aren't and don't want to hide that, but this is not political."
Between the lines: Latino Media Network said it will focus on media content creation and distribution across all mediums, with a specific focus on audio to start.
- The company is planning to expand beyond radio into podcasts and content on YouTube and other digital platforms. It will take a bilingual approach, producing and distributing content in Spanish and English across various platforms, like audio streaming and social, as well as its own channels.
- "We are interested in expanding the digital footprint across all of these stations," Morales Rocketto said. "YouTube is a major entry point for Latinos," she noted.
By the numbers: Radio has the highest weekly reach among Hispanic adults in the U.S. at 96%, compared to 92% of the total population, per Nielsen. Radio engagement among Hispanics ticked up dramatically during the pandemic.
- Podcast listening time among U.S. Hispanics jumped 44% in 2021, per Edison Research. More than one-third of U.S. Latino adults listen to podcasts monthly.
How it works: From a business perspective, the company says it will make money from advertising against the radio content and in the future, syndicating content to other stations.
- While the radio ad market has recovered from COVID, Valencia said there will be more business opportunities for the company as it expands digitally into multi-platform audio across YouTube podcasting and other places.
- From a content perspective, Latino Media Network said it will build programming around authoritative news personalities and subject matter experts to help the Latino community navigate complicated topics, like health care, finance and small business. While much of that content will be supported by advertising, some programs can be funded by philanthropy, Valencia said.
The big picture: The Latino Media Network raise and TelevisaUnivision deal represent the latest major moment of momentum for Hispanic media.
- Two weeks ago, Candle Media, the Blackstone-backed media holding firm led by Disney veterans Kevin Mayer and Tom Staggs acquired Exile Content Studio, one of the fastest-growing Hispanic content companies in the world.
- Last month, a startup backed by private equity purchased some of the most influential Spanish-language newspapers in the U.S.
- Latinos are driving the growth in population in the U.S., but the community has long been treated as a monolith. Latino Media Network said it will focus on creating content that addresses the different cultural and political nuances that impact different types of Latinos.
Bottom line: "So often our stories have been erased or invisible. In some ways, you wouldn’t know that Latinos will be the principal part of the U.S. population in our lifetime," Valencia said. "Us being able to bring a sense of belonging, influence and power to this community is incredibly important."
What's next: The company is hiring an executive team, including a CEO, to start recruiting talent and managing the TelevisaUnivision-owned assets.
- The transaction is expected to close by late 2022, following regulatory approval in the US.
Editor's note: This story has been updated with additional comment from Morales Rocketto about the company's politics.