Spanish Broadcasting Sys Stock Price, News & Analysis

Spanish Broadcasting System, Inc. (SBS) (OTC Pink: SBSAA) is a multimedia company focused on serving the U.S. Hispanic audience through radio, audio networks, television, digital platforms and live events. The company is described in its own releases as the largest certified minority-owned, Hispanic-targeted media company in the United States and a National Minority Supplier Development Council (NMSDC) certified media company. Its operations span broadcast radio, a national radio network, a television network, digital streaming properties, a pure-play digital marketing division and a nationwide live entertainment business.

SBS is frequently characterized in its news as a Hispanic broadcaster and Latino multimedia company. It owns and operates radio stations in major U.S. Hispanic markets, operates a large Spanish-language radio network, has developed Latino-focused streaming apps and digital ecosystems, and produces large-scale Latin music concerts and events. The company’s activities are directed at the U.S. Hispanic market and at Spanish-speaking audiences in the United States and Puerto Rico.

Radio stations and audio formats

According to multiple company announcements, Spanish Broadcasting System owns and operates radio stations located in major U.S. Hispanic markets, including Los Angeles, New York, Puerto Rico, Chicago, Miami, San Francisco, Orlando, Tampa and other large metropolitan areas. Its stations air several Spanish-language music and audio formats, including Tropical, Regional Mexican, Spanish Adult Contemporary, Top 40 and Urbano genres. The company highlights flagship stations such as WSKQ-FM in New York City, which it describes as America’s most-listened-to station in any language and the number one Spanish-language station in the world.

Beyond its owned-and-operated stations, SBS operates AIRE Radio Networks, which it describes as a national radio platform with over 290 affiliated stations reaching an estimated 95% of the U.S. Hispanic audience. Through this network, SBS distributes Spanish-language audio content across many local markets, extending its reach beyond the cities where it directly owns stations.

Television and Mega TV

Company disclosures state that SBS owns Mega TV, a network television operation with over-the-air, cable and satellite distribution and affiliates throughout the United States and Puerto Rico. Mega TV is described as a network that has provided award-winning programming and has built a position among Hispanic viewers in the U.S. and Puerto Rico. SBS has also announced a transaction to sell its Mega TV business and certain associated real estate to Voz Media for an agreed acquisition price, subject to regulatory approval, and later reported litigation and a settlement related to that transaction. These communications show that Mega TV has been a significant asset within the company’s media portfolio.

Digital platforms and LaMusica ecosystem

SBS describes a group of digital properties centered on LaMusica, a mobile app that provides Latino-focused audio and video streaming content. The LaMusica environment is further described as a digital ecosystem, which includes the LaMusica mobile app, the HitzMaker mobile app and a connected TV platform called LaMusica TV. HitzMaker is characterized in company materials as a new-talent destination or performance showcase for aspiring or trendsetting new artists and music aficionados.

In addition to these apps, SBS has created a pure-play digital marketing department called DigIdea Digital Marketing Solutions, sometimes referred to as Digidea. Company announcements describe Digidea as a department focused on digital marketing solutions, intended to provide a full-service marketing experience for clients and to participate in the broader digital advertising space. SBS also references access to a digital realm where brands can explore content, obtain insights and connect with a podcast community, indicating that its digital activities extend beyond streaming music and video.

Live events and SBS Entertainment

The company operates a live events division known as SBS Entertainment. In its own descriptions, SBS states that it produces a nationwide roster of live concerts and events, with a focus on Latin music. SBS Entertainment is credited with bringing to life some of the most recognized live Latin music experiences, including long-running events such as Calibash, which the company notes has historically sold out since its inception.

Company news also references signature events such as Mega Mezcla, Amor En Vivo and Mega Bash, which take place across key Hispanic markets and are presented at arenas and venues in partnership with venue operators. SBS has highlighted free arena concerts tied to the launch of new Hispanic radio formats in markets like Tampa and Orlando, demonstrating how its live events are integrated with its radio brands and promotional activities.

National partnerships and audio alliances

Spanish Broadcasting System has announced various partnerships that reflect its role in Hispanic audio and entertainment. One notable example is a multi-year strategic agreement between SBS Entertainment and Oak View Group, a venue development and management company. Under that agreement, SBS Entertainment’s events, including established Latin music brands, are scheduled to be presented at venues operated by Oak View Group in markets such as New York, Austin, Greater Palm Springs and the Orlando area, with plans to expand to additional arenas in North America and potentially Europe.

Another example is a global partnership between SBS, Prisa Media and Caracol Radio. In that announcement, SBS is described as a leading Latino radio owner/operator in the U.S., while Prisa Media is described as a large Hispanic audio and digital enterprise and Caracol Radio as a leading audio network in Colombia. The alliance is focused on launching, operating, distributing and monetizing new audio stations and live and on-demand streaming content and networks, including a slate of syndicated talent, aimed at the U.S. Hispanic market. The partnership includes the launch of Caracol Radio America on an SBS station in South Florida and digital streaming on the LaMusica app.

Focus on the U.S. Hispanic market

Across its communications, SBS emphasizes that it serves the U.S. Hispanic market and Hispanic audiences more broadly. The company describes itself as serving over 60 million people in the U.S. Hispanic market and notes that this market is often characterized in its materials as a multi-trillion-dollar economy. SBS positions its radio brands, audio networks, television operations, digital platforms and live events as culturally relevant content offerings for Spanish-speaking and Latino audiences.

In a report produced with Nielsen, SBS presents research on advertising in Hispanic-owned and Hispanic-targeted radio. The report, as summarized in company news, indicates that brands that consistently advertised on Hispanic-owned and Hispanic-targeted radio stations over a multi-year period showed higher returns on advertising spend compared to brands that did not invest in such stations. SBS uses this research to highlight the value of investing in Hispanic-owned media that delivers targeted and authentic Latino content and notes that its own operations sit at the intersection of Hispanic ownership, culturally relevant Hispanic content and scale.

Ownership, regulation and capital structure developments

Spanish Broadcasting System has reported regulatory developments related to its ownership structure. The company announced that it received a Federal Communications Commission (FCC) declaratory ruling permitting it to increase its limit on foreign equity ownership above the benchmark set under Section 310(b)(4) of the Communications Act of 1934, as amended. The ruling allows foreign investors to own up to a specified percentage of the company’s equity in the aggregate. SBS stated that, as a result of this ruling, it issued additional shares of its Class A common stock to former holders of its Series B preferred stock, completing the terms of a settlement that resolved shareholder litigation in Delaware Chancery Court.

The company has also disclosed legal proceedings and settlements related to the proposed sale of its Mega TV division. SBS announced the sale of Mega TV and certain real estate to Voz Media for an agreed price, subject to FCC approval. Later, it reported that it had filed a lawsuit alleging breach of contract and fraud related to the buyer’s failure to close the transaction and described alleged harms to SBS. Subsequently, SBS announced that it reached a multimillion-dollar out-of-court settlement with Voz Media regarding the default of the Mega TV acquisition, in addition to a deposit previously retained by SBS. The settlement amount was not disclosed in the company’s public statement.

Positioning in Hispanic media and advertising

Company communications describe SBS as widely regarded in industry circles as a leader in the Latino multimedia sector and as the largest certified minority-owned, Hispanic-targeted media company in the nation. SBS highlights its role as a Hispanic-owned publisher that offers culturally relevant content at scale, across radio, television, digital streaming and live events. It also emphasizes its certification by the National Minority Supplier Development Council and its focus on diversity, equity and inclusion within the advertising and media ecosystem.

Through its radio stations, AIRE Radio Networks, Mega TV, LaMusica digital ecosystem, DigIdea digital marketing department and SBS Entertainment, the company presents itself as offering advertisers and partners access to Hispanic audiences through multiple channels and content types. Its own materials stress the importance of authentic connections with Latino audiences and the potential for advertisers to achieve higher returns when working with Hispanic-owned and Hispanic-targeted media.

Frequently asked questions (FAQ)

The following questions and answers summarize key points drawn from Spanish Broadcasting System’s public communications.

• What does Spanish Broadcasting System, Inc. do?
  Spanish Broadcasting System, Inc. is a multimedia company that owns and operates Spanish-language radio stations in major U.S. Hispanic markets, operates the AIRE Radio Networks national radio platform, owns the Mega TV network television operation, produces live concerts and events through SBS Entertainment, and manages digital properties such as the LaMusica and HitzMaker apps and the LaMusica TV connected TV platform. It also operates a pure-play digital marketing department called DigIdea Digital Marketing Solutions.
• Which markets does SBS serve with its radio stations?
  Company announcements state that SBS owns and operates radio stations in major U.S. Hispanic markets including Los Angeles, New York, Puerto Rico, Chicago, Miami, San Francisco, Orlando and Tampa, as well as other large metropolitan areas referenced in its news releases.
• What is AIRE Radio Networks?
  AIRE Radio Networks is described by SBS as a national radio platform with over 290 affiliated stations that reaches an estimated 95% of the U.S. Hispanic audience. It distributes Spanish-language audio content across many local markets beyond SBS’s owned-and-operated stations.
• What is Mega TV within SBS’s business?
  Mega TV is described as a network television operation owned by SBS, with over-the-air, cable and satellite distribution and affiliates throughout the United States and Puerto Rico. SBS has announced a planned sale of its Mega TV business and certain associated real estate to Voz Media, followed by litigation and a settlement related to the buyer’s default, indicating that Mega TV has been a significant part of its media portfolio.
• What are LaMusica and HitzMaker?
  LaMusica is a mobile app owned by SBS that provides Latino-focused audio and video streaming content, and is part of a broader LaMusica digital ecosystem that also includes LaMusica TV, a connected TV platform. HitzMaker is described as a new-talent destination or performance showcase for aspiring artists and music aficionados within this digital portfolio.
• What is DigIdea Digital Marketing Solutions?
  DigIdea is a pure-play digital marketing department created by SBS. Company statements describe it as a digital marketing solutions group intended to offer clients a full-service marketing experience and to help advertisers reach consumers throughout their purchase journey using digital tools.
• How does SBS describe its role in the U.S. Hispanic market?
  SBS describes itself as serving the over 60 million people that comprise the U.S. Hispanic market and characterizes this market as a multi-trillion-dollar economy. The company emphasizes that it is Hispanic-owned, Hispanic-targeted and NMSDC certified, and that its content is designed to be culturally relevant for Latino audiences.
• What research has SBS presented about Hispanic-owned media?
  In collaboration with Nielsen, SBS released a report and marketer’s guide on investing in Hispanic-owned and Hispanic-targeted audio content. The company’s summary of the report states that brands consistently advertising on Hispanic-owned and Hispanic-targeted radio stations over a multi-year period achieved higher returns on advertising spend than brands that did not invest, and that advertising investments have not kept pace with Latino population and spending power growth.
• What regulatory developments has SBS reported?
  SBS announced that the Federal Communications Commission issued a declaratory ruling permitting the company to increase its limit on foreign equity ownership above the standard benchmark, allowing foreign investors to own up to a specified aggregate percentage of its equity. SBS stated that it issued additional shares of Class A common stock to former Series B preferred stockholders as part of completing a settlement that resolved shareholder litigation.
• What legal actions has SBS disclosed related to Mega TV?
  SBS first announced an agreement to sell its Mega TV business and certain real estate to Voz Media, subject to FCC approval. Later, it disclosed a lawsuit alleging breach of contract and fraud related to the buyer’s failure to close the transaction, and then announced that it had reached a multimillion-dollar out-of-court settlement with Voz Media, in addition to a deposit previously retained by SBS. The company did not publicly disclose the settlement amount.