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Univision and Hispanic assimilation: a market test
When Univision [the major Spanish-language TV station] put itself on the auction block earlier this year, it was widely seen as an effort...to capitalize on the surging interest in the fast-growing Hispanic media sector. Univision signaled early on that it was seeking $40 a share, or more than #13 billion, and was confident it would attract interest from both major media companies and private-equity investors.
But big media...never emerged as serious bidders.
Some of the issues were the general decline in television advertising and regulatory constraints on cross-ownership. The article continues:
And then there is the demograhic issue: New Hispanic immigrants to the U.S. frequently are drawn to Univision and its popular telenovelas -- essentially Spanish-language soap operas But their children eventually become more mainstream media consumers, after immersing themselves in English-language programming.
That is from The Wall Street Journal, 23 June 2006. The share price has been falling.
If you disagree with me on immigration and assimilation, as I know a few of you do, I urge you to buy stock in Univision.
Posted by Tyler Cowen on June 24, 2006 at 01:19 PM in Economics | Permalink
Comments
You are right on the mark. Data from the USC demographics unit says that despite the over heated rhetoric in LA this generation of immigrants are assimilating very rapidly in language as well as other characteristics - for example in marriage outside their ethnic group.
Posted by: drtaxsacto at Jun 24, 2006 1:15:52 PM
For a true indication of whether there's a declining demand for watching TV programming in Spanish, there would need to be a
true apples-to-apples comparison (or as close as possible) ... such as offering all the exact shows on a given English-speaking
channel, in Spanish - and then see whether the Hispanic immigrants and their children would be inclined to stay with one or
over time, the other. Instead, there's a marked difference between what's offered on Univision versus the regular stations -
so that, I think you're right, the subsequent post-immigrant families do indeed immerse themselves in our general culture, and
therefore TV programs too. But I would only say, that it's not because of the language - rather the content.
Posted by: Tom at Jun 24, 2006 1:55:54 PM
Tom, I think that's exactly Tyler's point. Immigrants undertake the non-trivial task of learning another language because of the content.
No one (or very few people) learns a new language just because it's a different language, they learn it because of what it gives them access to, be it jobs, schools, or in this case, superior television programming. That's almost the definition of assimilation.
Posted by: Tim Galebach at Jun 24, 2006 2:22:55 PM
I'm still agnostic on the topic of immigration, but I really like this argument. A lot of my friends are of the granola-eating, peak-oil-theorizing sort, and I find that the line "well if you really believe that, go buy some oil futures and get rich!" works pretty well, onceI explain to them what a futures market is.
Those who don't see the error of their ways hide behind a refusal, on moral grounds, to take part in the " oppressivecapitalist system." Yeesh
Posted by: Conrad at Jun 24, 2006 2:25:22 PM
Herr Cowen,
Assimilation is a possible factor. However, it could also be the quality of the programming on Univision. After all, it is one station with programming that includes many lame, cheesy soap operas. The assimilation argument would be stronger if there were more stations with more variety/better quality and support from the next generation remained low.
Posted by: Chairman Mao at Jun 24, 2006 5:33:13 PM
Come on, Tyler, that's a very weak argument. There hasn't been any change in the rate of language acquisition between earlier in the year and now. What has changed recently is that, following Bilbray's victor in the House special election running on an anti-illegal immigration platform, the Speaker of the House last week showed backbone by announcing that the House wouldn't rush into a smoke-filled conference room and compromise with the Senate, but would instead go to the nation and whole hearings around the country on this momentous bill. That probably doomed the chance of a big increase in Hispanic immigration and made possible an actual cutback. If you are looking for reasons Univision's sale this weak hasn't gone as well as planned, the political climate in Washington would appear obviously much more relevant.
Tyler, I always end up playing the heavy here in the Comments because you just let your emotions run away with you on the topic of immigration. You would do your reputation a lot of good if you'd set yourself a rule of waiting overnight before posting on immigration and see if your latest brainstorm holds up once your feelings calm down.
Posted by: Steve Sailer at Jun 24, 2006 6:42:00 PM
"lame, cheesy soap operas?"
My spanish is what it is today because of the smokin' hotties that grace nearly every telenovela. Cheesy, sure, but lame??
As for the political climate and the prospects for Univision's market, I believe the premise is that:
a) if the 10M+ immigrants and their offspring did not assimilate then,
b) Univisions market share will grow forever
c) if a) does not hold then their marketshare may stagnate
I doubt the perceived value of Univision hinges totally on recent congressional debates on immigration.
Posted by: GringoSalado at Jun 24, 2006 9:11:01 PM
A. Market data of more relevance to the language assimilation question is found in my new article "One World, One People, One Sport" in The American Conservative: "Univision has paid $325 million for the Spanish-language rights in America to the 2010 and 2014 World Cups, while Disney (ABC and ESPN) chipped in only $100 million for the English-language rights to these same 128 games. NBC, in contrast, bought the 2010 Winter Olympics and 2012 Summer Olympics for $2.2 billion." In other words, the next two World Cups are worth 3.25 more in Spanish than in English in the U.S. This does not suggest a major migration of viewers from Univision to English-language stations.
B. Univision's current large profits derive in great part from a ferocious deal that Jerry Perrenchio, the non-Spanish-speaking Italian-American prime owner of Univision rammed through with Mexico's Televisa, getting Televisa's telenovelas (soap operas) cheap. The deal runs out in ten years, at which point Univision will have to pay market price for its main content. This probably has more to do with Univision being offered "only" $11 billion.
C. Unlike the Korean station in L.A., Univision, at least in LA, does not run English language subtitles on the Hollywood movies it airs. I watched half of "Repo Man" on Univision recently because I almost have it memorized, but the lack of English subtitles eventually drove me away.
D. As this suggests, Mr. Perrenchio does not want his viewers to learn English. In 1998, the billionaire was the biggest donor to the campaign against Ron Unz's successful Proposition 227 that cut down on bilingual schooling in favor of English immersion. Mr. Perrenchio, by the way, has never bothered to learn Spanish. Evidently, he doesn't see any need to watch the crud he puts on Univision, other than perhaps to ogle the blondes bimbas and laugh at the mestizo stereotype comic relief.
E. Mexico has a severe race gap, as the sharp racial difference between the blonde babes and their Latin Lover Spanish men on the telenovelas and the mestizo audiences points out. People who look like the average Mexican-American only show up on Univision playing maids or wearing giant sombreros and falling down.
Posted by: Steve Sailer at Jun 25, 2006 1:51:51 AM
Univision dropped 7% between Tuesday's close and Thursday's close, which fits nicely with my theory that the announcement on Wednesday by the Speaker of the House that the House would take a hard line on immigration has hurt Univision's price.
It makes a lot more sense than Tyler's theory (a.k.a., wishful thinking) that the world suddenly realized in the middle of last week that immigrants were assimilating.
http://www.investorguide.com/stock-charts.cgi?ticker=UVN
http://edition.cnn.com/2006/POLITICS/06/21/immigration.hearings/
Posted by: Steve Sailer at Jun 25, 2006 2:16:34 AM
Steve,
On (A) there is the problem that as people assimilate linguistically they also assimilate culturally. That said, the major market for televised soccer matches would probably be among Spanish-speaking immigrants and not their assimilated children. The value of World Cup rights in Spanish probably says more about the number and buying power of immigrants and nothing about their children. I would bet that in communities where the ratio of first to second generation Latino immigrants was high you would find more interest in soccer and where it was low you would see more interest in basketball, football, baseball, etc.
Posted by: Steven Schreiber at Jun 25, 2006 3:15:23 AM
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Posted by: sk2 at Jun 25, 2006 4:23:17 AM
http://dimer.tamu.edu/simplog/archive.php?blogid=3&pid=3799
Excerpt:
I recall that when the World Cup was going on in France, my students preferred to watch the games on Univision, even when the same games were on an English language station at the same time in the same room at the Rec Center. The students reporting their preference for Univision were not native English speakers...they were Chinese.
I don't think either Univision's stock price or how much they paid for the World Cup says much about assimilation.
Posted by: Jim Hu at Jun 25, 2006 4:33:48 AM
A) Nobody who follows foot, err, socc, er the World Cup would be surprised to discover that a Spanish language telecast will bring higher ratings, and thus be worth more, than any telecast in English.
B) This is a very salient point but I don't think it counters the notion that Univision etc. would be more highly prized by English language networks if it were true that Hispanics did not assimilate culturally/linguistically.
C-D) Why would any sane CEO of a Spanish language network want his viewers to learn English?
E) Your point about the degree of race consciousness in Mexican society is well taken, and I wish it were more well known. It amounts to no less than an unspoken caste system IMO and is an awful vestige of Spanish colonialism. I for one am very proud to live in a country where these Mestizos can at last have a fair chance at a good life, and I'm sure the appalling lack of opportunity present in Mexico in no small way explains the often incredible fortitude exhibited by many immigrants in seeking a better life here. In my opinion these are exactly the kind of folks that this country needs to continue our tradition as a country of immigrants who were denied equal opportunity elsewhere, and serves as a refreshing reminder to those of us who have forgotten just how good we do have it here.
Posted by: GringoSalado at Jun 25, 2006 5:33:34 AM
I don't have any idea how to check this -- but I am pretty sure that the local ABC affiliate in LA ran a Spanish Language spot for Mercedes during one of the WC games. I remember noting how strange it was, it took a couple second for it to dawn on me that advertisment was in Spanish
I realize it is a taunt at immigration realists, but I sure hope that Cowen's economics is better than the post indicates. There are, for example, many reasons other than demographics why Univisions stock my be falling. For example: Have other broadcasters entered the Spanish-Language market? (I believe Clear-Channel has in a pretty big way, but I might be wrong).
Here is another (better) test of language-wise assimilation. How much of the radio spectrum, as licensed by the FCC in, say, LA is taken up by Spanish vs. English? I'd bet dollars to doughnuts that English is retreating rapidly by this test.
Posted by: stari_momak at Jun 25, 2006 11:53:32 AM
Tyler Cowen and the WSJ may wish to argue that the recent Univison (UVN) stock price dip provides evidence of Hispanic assimilation. However, even a modest reading of UVN’s history strongly supports the opposite case. UVN only targets Spanish speakers. Like it or not, UVN has grown explosively as this population has expanded. Perhaps worse, UVN has acted aggressively to prevent Hispanic assimilation in the United States.
Since 1993 UVN’s revenues have grown from $105 million to $1.953 billion in 2005. UVN was first profitable in 1996 with a net income of $10.4 million. In 2005, profits reached $187.2 million. UVN went public back in September of 1996 and first traded at around $8 a share. Even with the recent decline, the stock has quadrupled. In the same time period Disney (DIS) has risen by around 50%. Notably, Time Warner (TWX) is up 8 fold. However, for reasons unknown to me TWX crashed at around the time of the UVN IPO.
Certainly Wall Street expects great things from UVN. The company consistently trades at a growth stock multiple. The trailing P/E for UVN is 57.11. By contrast, the trailing P/E for DIS is 22.09, TWX 22.99. Other numbers tell an even stronger growth story. The Prices/Sales (P/S) ratio for UVN is 5.09. By contrast, DIS is 1.99 and TWX 1.68. The Enterprise Value/Revenue (EV/R) ratio for UVN is 5.78. The EV/R ratio for DIS is 2.31 and for TWX, 2.07.
A quick check of UVN’s annual reports (http://www.sec.gov/edgar/searchedgar/companysearch.html) provides little evidence of a company threatened by Hispanic assimilation. A quote from an annual report may help here.
“Approximately 68% of all Hispanics, regardless of income or educational level, speak Spanish at home. This percentage is expected to remain relatively constant through 2010. Consequently the number of Hispanics speaking Spanish in the home is expected to increase significantly in the foreseeable future.”
The company projects that the number of home Spanish speakers will grow from 16.2 million in 1990 to 27.8 million in 2010. Further growth after 2010 is anticipated as well.
UVN hasn’t been shy about opposing Hispanic assimilation in the US. Back in 1998, Jerrold Perenchio donated $1.5 to oppose Proposition 227. Before Prop. 227, Spanish speaking children were systematically failing to learn English in California’s schools. Apparently, UVN liked it that way. UVN also ran “public service” announcements opposing Prop. 227 worth between $1 and 2 million dollars. See http://www.onenation.org/finan.html for more details. Fortunately for Hispanic children and the United States, Prop. 227 passed 61-39% although Hispanics voted against it.
Posted by: Peter Schaeffer at Jun 25, 2006 12:11:14 PM
'...you just let your emotions run away with you on the topic of immigration.'
People..glass houses...stones.
Posted by: Patrick R. Sullivan at Jun 25, 2006 12:23:40 PM
I must confound the statistics ... despite being English-speaking I've occasionally watched boxing on Spanish stations. It doesn't matter that the commentary is entirely in Spanish (I can understand some, but that's not the point), as boxing is the sort of sporting event that pretty much "speaks for itself." I've also see a few bits of the World Cup on Spanish-language TV, once again soccer's the sort of sport for which announcer commentary serves relatively little purpose.
Of course, this wouldn't be necessary if most boxing on English-language TV weren't hogged by the "premium" networks like HBO and Showtime or, even worse, cast off to the pay-per-view ghetto. ESPN2's Friday Night Fights is nearly the only boxing still left on free TV. But I guess this is another topic for another time.
Posted by: Peter at Jun 25, 2006 1:20:56 PM
The immigration debate would have a big effect on Univision's future if we assume Tyler's right about assimilation over time (that is, that most immigrants' kids will speak English fluently). Why is there a big pool of people currently in the US who can only function in Spanish? To a large extent, it's because there is a consistent inflow of immigrants from Spanish-speaking countries. Even if their kids speak English just fine, the original immigrants are likely to feel more comfortable in Spanish, even if they speak English well enough to get along.
Posted by: albatross at Jun 25, 2006 1:42:40 PM
Let's suppose, strictly for the sake of argument, that Sailer's response to immigration is as emotional and non-fact driven as an immigration enthusiast like Tyler Cowen's. There are still several distinguishing characteristics
1) Sailer's are more closely alligned with the America people's, who despite decades of propaganda still tell pollsters they want less immigration and are opposed to illegal immigration.
2) Expressing emotional preferences like Cowen's will get you editorials in the LA Times, the WSJ etc. Expressing those like Steve Sailer's leaves you with a few small print outlets, and almost certainly would hurt your hiring chances as , say, a young journalist or academic.
3) Sailer's preferences would lead to stability. He is not the one calling for passivity (or worse) in the face of massive demographic change. Cowen, on the other hand, wants to remake the country. Certainly justice would give priority to Sailer's preferences. After all, if Cowen finds America as it is boring, drab etc he can always pick up and move to Mexico or whereever (although it might be hard to find a job, you see the Mexicans enforce their immigration laws) . It is certainly wrong for immigration ethusiasts to impose their preferences on people who actually liked the Southern California of, say, twenty years ago and want to preserve what's left of it.
Posted by: stari_momak at Jun 25, 2006 2:50:05 PM
Not being a fan of football/soccer nor the World Cup, I have no direct knowledge, but I overheard a conversation the other day where a non-Spanish speaker (I'm assuming) said that he enjoyed watching the Spanish-language broadcast of the game because the announcer was just so much more excited about the game than the English-language announcer. I think this was in Canada. I don't know if in Canada people get their World Cup on ESPN or a Canadian channel.
Posted by: Sameer Parekh at Jun 25, 2006 6:48:07 PM
Stari,
I find your post disturbing. To wit:
"1) Sailer's are more closely alligned with the America people's, who despite decades of propaganda still tell pollsters they want less immigration and are opposed to illegal immigration."
Funny, those American people. If you ask them "should homosexuals be forbidden from teaching in the public schools", they'll express less-than-lukewarm support (somewhere in the 40s) for the idea, but if you ask them "should homosexuals not be allowed to teach in the public schools", they'll line up to support it (somewhere in the 60s). Why do I bring this up? Because question wording in surveys matters, and it matters a great deal. It turns out that framing the choice as one between leaving illegal immigration as is versus increased enforcement measures will turn out one way, and framing the choice as one between leaving illegal immigration as is and a system of laws that stems some of that tide while legalizing those here (through some semi-punative process) will turn out quite differently. In short, I find this point spurrious. That others can write questions that 60 percent or more of Americans will answer the way I like does not impress me.
"2) Expressing emotional preferences like Cowen's will get you editorials in the LA Times, the WSJ etc. Expressing those like Steve Sailer's leaves you with a few small print outlets, and almost certainly would hurt your hiring chances as , say, a young journalist or academic."
Um, I am unclear why I care that more people who have greater education and exposure to the world (i.e., journalists, editors, and academics) look down upon Mr. Sailer's argument, but agree with Prof. Cowen's, except inasmuch as it suggests that Prof. Cowen's is probably a pretty good idea and Mr. Sailer's is probably a pretty silly one.
"3) Sailer's preferences would lead to stability. He is not the one calling for passivity (or worse) in the face of massive demographic change. Cowen, on the other hand, wants to remake the country. Certainly justice would give priority to Sailer's preferences. After all, if Cowen finds America as it is boring, drab etc he can always pick up and move to Mexico or whereever (although it might be hard to find a job, you see the Mexicans enforce their immigration laws)."
Tell me, Stari, are you a native of North America? If not, you are lucky that the original members of the Iriquois, Cherokee, and other nations (whose names I do not wish to butcher by attempting to type them) did not adopt your particular attitude towards newcomers. It is totally unclear to my why 'justice' should allow you to pick who my neighbors will be. Or who yours will be. In fact, I am unclear why the choice to move into a particular geographic location, find employment by those willing to pay for my labor, and purchase or rent housing by those willing to accept my wages for it is the business of anybody other than those involved in the transaction.
I find your parting comment ironic. We "immigration enthusiasts", as you call us, do not impose our preferences upon anybody. If you "actually liked the Southern California of... twenty years ago", you had a choice: you could spend the resources necessary to keep it that way (by buying up the real estate and refusing to sell it to those unlike yourselves). But please, don't tell me that I impose my preferences by requiring that you not use my resources and the coercive power of the state to limit the mobility of free and enterprising people who wish to better their lives by changing their locale, for that is an imposition of yours that I simply will not abide.
Good day,
Hamilton
Posted by: hamilton at Jun 25, 2006 8:03:05 PM
From a melting pot perspective, I find the late night ads on Univision encouraging. Lots of "Learn English" tapes and CDs being sold. The ads typically show a young Mexican woman working as a maid, then she buys the tapes, then the ad show her driving a nice car, working an office job, eating out at a nice restaurant, etc, etc.
The incentive to learn English is strong. Especially the incentive to make sure your kids learn English. Most Mexican immigrants know that Spanish is the language of busboys, maids, construction workers, etc, etc. To be successful in America they know they (or at least their kids) need to learn English.
Posted by: jim at Jun 26, 2006 1:29:24 AM
Hamilton,
How questions are worded does influence polling results. For example, one poll asked
“Should illegals aliens be allowed to stay in the United States while millions of people are obeying the law and waiting to legally enter the United States”
By a margin of around 9:1 the answer was NO. Of course, that is what you appear to favor. The cleanest set of polling questions I have seen can be found at http://www.cis.org/articles/2006/2006poll.html. You may not like CIS. However, I challenge you to demonstrate that the questions were loaded against Amnesty.
Those "free and enterprising people" are breaking the law by violating our borders. That is a crime under the laws of the United States. Somehow, if they were stealing your car I doubt you would be so approving. If they were breaking into your house and removing its contents, your enthusiasm might be slightly diminished. Like it not state power protects your car and your home. Presumably Stari's resources are used for this purpose. Stari is asking that our borders be enforced. Until you are willing to hand your possessions and your person over to criminals (not limited to illegal aliens), I don't see where you have any grounds to object to your resources being used to enforce the border and deport illegal aliens.
Twenty year ago (really 30+), Los Angeles offered high wages, affordable housing, great public schools, mobility, plentiful power and water, many safe neighborhoods, lower taxes, living space, etc. A generation of Open Borders have ravaged all of these benefits and made California one of the least livable parts of the United States. Indeed, native born Americans of all races are net leaving California, driven out by the horrors of uncontrolled immigration. You may be proud of this. The American people, apparently including Stari, don’t see it that way.
Posted by: Peter Schaeffer at Jun 26, 2006 2:03:34 AM
If folks are leaving California due to the ravages of illegal immigration then why are they coming to Texas?
Posted by: GringoSalado at Jun 26, 2006 2:59:34 AM
