The Heavyweight On Latin Airwaves
The most powerful mogul in Spanish TV distrusts the media, rarely gives interviews, and doesn't even speak Spanish. He's a jet-hopping, 73-year-old former boxing promoter who pals around with George Bush (41 and 43) and lives in the sprawling Bel Air (Calif.) mansion featured in the 1960s sitcom The Beverly Hillbillies. He loves throwing lavish parties -- once he even flew in Henry Mancini and Andy Williams to perform at his son's 1981 wedding. Still, to most people in Hollywood, where as a talent agent he once championed the careers of Elizabeth Taylor and Marlon Brando, Jerry Perenchio is an enigma.
In an era of publicity-courting media moguls such as Rupert Murdoch and Sumner M. Redstone, the self-possessed Andrew Jerrold Perenchio quietly runs what may be one of the more valuable pieces of media real estate in the business. Univision Communications Inc. (UVN ), with two broadcast networks, a cable channel, a radio network, and three music labels, is the biggest player in the fast-growing Hispanic market, which today includes one in every seven Americans. Perenchio made an early bet on what seemed like a niche market by buying five TV stations and a struggling Hispanic network. Today that niche has exploded into a demographic phenomenon: Univision draws more young viewers in prime time than MTV and more men than ESPN, according to Nielsen. And in Hispanic-rich markets such as Los Angeles, Miami, and Phoenix, it often beats English-language rivals to snare the younger viewers advertisers crave.
AN IRON HAND
The payoff: Univision nearly doubled its profits in 2003, to $155 million, on revenues of $1.3 billion. Adjusted for stock splits, shares have more than tripled, to about $28 a share, since the company first went public in 1996. And Perenchio is firmly in control. He takes no salary but owns an 11.5% stake.
For all of Univision's success, though, few folks really know what's on Perenchio's mind. Perhaps more than any other media company, Univision reflects the secretive, often combative personality of its boss. The onetime college boxer was well into his 60s when he wrestled a business partner on a snowy sidewalk outside a Manhattan restaurant over who got to pick up the check. At Univision, Perenchio rules with a 20-point manifesto that demands that employees think big, avoid mistakes, practice teamwork, and "hire people smarter and better than you." The No. 1 rule: "Stay clear of the press. Stay out of the spotlight. It fades your suit. Only promote the brands."
Perenchio is hardly a Howard Hughes-like recluse, though. He and his third wife, Margie, are spotted at movie premieres and courtside at Los Angeles Lakers games. And he is not shy about throwing his support to politicians; he has donated millions to high-profile Democrats and Republicans in recent years. "He's one of the most powerful guys in this city, but he doesn't like being in the limelight much," says former Warner Bros. Chairman Robert Daly, who plays in a regular poker game with Perenchio. "He just likes people to leave him alone."
Not surprisingly, Perenchio politely turned down a BusinessWeek request to be interviewed, saying in a letter: "I would love you to do a fair and balanced story about our company." In building Univision over the past 12 years, however, Perenchio hasn't always been so genteel. Univision executives, say those who deal with them, push advertisers to pay hefty rates and have tried unsuccessfully to require them to buy ads on the two-year-old Telefutura network and Galavision cable channel along with Univision spots. "They went at it very aggressively and it ruffled a lot of feathers," says Jessica Pantanini, vice-president of media-buying firm Bromley Interlink, which spends $60 million a year on Univision. The company declined comment.
"THAT QUIET CHARM"
In addition to advertisers, Univision battles rivals, unions, and even partner Grupo Televisa (TV ), the Mexican TV giant that provides one-third of Univision's programming and is a 9.4% owner. Perenchio's execs themselves aren't spared: When a top lieutenant gave an unauthorized interview to the press in 1995, Perenchio fined him $25,000. On June 9, Univision took on powerhouse Nielsen Media Research Inc., suing the rating agency, alleging its new service undercounts Hispanics in markets like L.A.
It's not unusual to hear Perenchio compared to hard-boiled Hollywood bosses like Jack Warner. "Jerry is from the old school: If he doesn't get what he wants, he has a volatile temper," recalls movie producer Jake Eberts, who worked for Perenchio's Embassy Pictures studio in the mid-1980s. He says he was fired when he couldn't round up enough private investors to finance a slate of movies. "When he isn't seducing you with that quiet charm, he's bouncing you off the walls," says Eberts.
Perenchio's media empire might be tiny in comparison with the industry's giants, but nobody disputes that it is a gold mine. Disposable income among Hispanics has grown 29% since 2001, to $652 billion last year, double the pace of the rest of the population. Having that demographic as its captive audience has made Univision an attractive takeover target. And Perenchio has had offers. Viacom Inc. (VIA ), for one, would love to own Univision, having watched NBC (GE ) snap up Univision's chief rival, Telemundo Communications Group Inc., in 2002 for $2.7 billion. Viacom tried to buy Univision two years ago, with an offer said to have been $6.5 billion in stock and debt, but Perenchio rejected it as too cheap. Says Viacom Co-President Leslie Moonves, another of his poker pals: "It's no secret that we're interested in Spanish-language TV. I just don't think Jerry is selling."
Maybe. Maybe not. It's never easy to tell with Perenchio. One thing is certain, though: Any buyer of Univision will feel as though he has been through the kind of prizefights Perenchio used to promote. "The rule about Jerry has always been if he's selling, you shouldn't be buying," says former Viacom President Frank J. Biondi Jr.
It is that style that has made Perenchio among the most successful -- and most diverse -- of Hollywood showmen. He has been in the business for nearly 50 years, influenced early on by MCA Inc.'s publicity-phobic studio boss Lew Wasserman. Perenchio, the son of a Fresno (Calif.) winery owner, started working his way through college by booking bands at the University of California at Los Angeles, where he once escorted Marilyn Monroe to a dance. He went on to represent Hollywood's hottest acts and later arranged some signature sporting events. In 1971 he promoted the Muhammad Ali-Joe Frazier fight in Madison Square Garden, then two years later the "battle of the sexes" tennis match between Billie Jean King and Bobby Riggs. Each time, he wowed folks with his dealmaking savvy. "He came to us with a payday of $5 million for each fighter, and we were only getting $2 million at the time," recalls Ali's then-manager Bob Arum. "So he doubled the prices at the theaters for pay-for-view and promoted it like a movie premiere."
In 1985, Perenchio and his onetime client, All In the Family creator Norman Lear, sold their TV and film company Embassy Communications to Coca-Cola Co. (KO ) for $485 million. He collected $140 million by buying, then selling, the Loews Cineplex theater chain within a year.
Perenchio's biggest score, though, came with his hunch about Hispanic media. It was the late 1980s, and he was no stranger to the Latin scene, having represented such singers as José Feliciano and Julio Iglesias. At first, Perenchio bought Spanish-language Channel 47 in New York to launch a movie-and-boxing subscription service -- but changed his mind when local cable channels beat him to it. But he noticed that ratings were jumping for the Spanish programs at the tiny station. In 1992, he teamed up with Mexico's Televisa and Venezuelan programmer Venevision International to buy five more stations and a small Spanish network for $550 million, a launchpad for what was to become Univision.
Key to the deal was the steady stream of soap opera-like telenovelas and soccer games that Univision got from its two Latin partners at insanely low costs. Combined with Univision's shows, such as the hit variety show Sábado Gigante and talkers like Cristina, Univision became a powerhouse as the U.S. Hispanic population swelled.
If executives at Televisa figured Perenchio was simply a puppet for Televisa's powerful Azcárraga family, Perenchio left no doubt that he was firmly in charge. Univision threatened to sue Televisa in 2000 when it also tried to deliver its programs independently by satellite to the U.S., according to filings. The standoff ended last year when Televisa gave Univision a 50% stake in its TuTV pay-TV channel.
Univision's hardball tactics extend to just about everyone the company does business with, say several sources. In 2000, the company withstood a 32-day hunger strike by employees at its Fresno TV station, who claimed they were paid less than their English-speaking counterparts. But starving workers were too much of a black eye even for Perenchio. Univision eventually increased the employees' pay. Today, the company, which says about 10% of its 4,300 employees are unionized, is negotiating with the unions at its New York and Los Angeles stations. "They're probably one of the worst employers we ever have to deal with," says Dan Mahoney, assistant to the president of the National Association of Broadcast Employees & Technicians.
Still, insiders say that Perenchio rewards the good years with hefty bonuses, paying $30 million out of his own pocket three years ago. But when the advertising downturn cut Univision's 2001 earnings, his top executives took a 10% salary cut. He leaves most of the daily operations to his executives but was himself the architect of such deals as last year's $3.5 billion merger with radio giant Hispanic Broadcasting Corp.
No doubt a help in getting the deal approved in Washington was Perenchio's loyalty to the Bushes: Over the years he has contributed $711,500 to the President and his father, says Common Cause. To hedge his bets, though, Perenchio's Chartwell Holding real estate company donated $167,667 to New Mexico's Democratic Governor Bill Richardson, a Hispanic. Richardson wrote to Democratic members of Congress to push for the radio deal.
Perenchio has never let on about his plans for the future -- or when he might retire. For now, he's el gringo at the top of one of the most valuable media franchises, an old-fashioned Hollywood mogul riding high on the new America.
By Ronald Grover in Los Angeles, with Brian Grow in Atlanta and Geri Smith in Mexico City