V I D E O • A G E JA N U A R Y 2 0 1 0 (Continued from Cover) launched last September as a 24/7 service with 56 hours a week of new programming, mostly produced at LBI’s three sound stage studio complex in Burbank, California. Estrella TV affiliates receive 40 percent of the ad inventory, while LBI retains the remaining 60 percent. Programming generated in Burbank is retrieved from its server storage via IPTV by LBI’s Dallas center, which then packages it in a feed for two time zones. Estrella TV was able to achieve its vast coverage thanks to timely digital conversion, which gave U.S. TV stations three extra channels to program. In the words of Bill Garcia, the Burbank-based director of affiliate relations, the aim for LBI, is to be placed on the “dot 2,” where “dot” stands for the punctuation indicating channels after the primary one (in the case of channel 62 for example, there is 62.2). How far does LBI want to reach? “Every market where Univision is,” answered Lenard Liberman, the 47-year old son of LBI founder and president, José Liberman. Don José, as he’s generally known, is now 83. He emigrated to Los Angeles from his native Veracruz, Mexico, to attend college in 1946. After completing his U.S. studies, he went to work for a pharmaceutical company that was heavily advertising on radio to reach the local Hispanic community (Latin Americans in the U.S.). Realizing the business potential of radio advertising, Don José went into radio broadcasting in Hollywood in the early ’60s (he doesn’t remember the exact year) and in 1987, bought KWIZ-FM, his first radio station, in Santa Ana, California. He made the purchase with his son Lenard, who at the time had just graduated from Stanford University with a law degree. Don José also has two daughters who are not in the business. In 1998, the Libermans acquired their first TV station, KRCA Channel 62 in Burbank, which is now LBI’s flagship station. Today, in addition to the six O&O TV stations, Liberman Broadcasting owns one TV network (Estrella TV, or, Star TV) and a total of 22 radio stations, which, aside from being profit centers of their own, provide needed cross-promotion and bonus spots for large TV advertisers. In 2007, Liberman raised $200 million from two equity investors, Oaktree Capital and Tinicum, and began expanding nationally with a $10 million purchase of KPNZ-TV in Salt Lake City, Utah and KWIE (now KRQB-FM) in San Jacinto, California for $25 million. The following year, LBI purchased KVPA, a low-power TV station in Phoenix, Arizona, for $1.25 million. While waiting to add a seventh TV station in New York City, LBI also has holdings in Texas (Dallas and Houston) and San Diego, California. Today, the group has a workforce of 776 people. LBI’s strategy may call for other TV station acquisitions, because as Lenard said, “Stations that a few years ago were valued at $44 million, today are worth just $5 million.” On the other hand, he acknowledged that “value is in content, not distribution.” Perhaps unrelated to the infusion of new funds in 2008, Lenard resigned as LBI’s Chief Financial Officer, yet continued as evp and secretary of the group’s set of companies. Wisdom W. Lu, a former banker who previously served as Chief Investment Officer at Health Net, became CFO. LBI’s COO is Winter Horton. Always one to shun the limelight, Don José is still the president of the company and goes to the station every day, but today it’s run by Lenard. Don José is also camera shy, declining to have his photo taken for this article. He reluctantly agreed to talk to VideoAge. Students and TV historians should know about your accomplishments, we pleaded. “Having money in the bank is more important,” he said, adding, “My son Lenard now runs the business, he’ll be able to answer all your questions.” Lenard is quite tall and towers over his father, whom he reveres. Personality-wise, they also differ, with Don José’s easy demeanor and Lenard remaining rather stern, rarely cracking a smile. The son is an orthodox Jew; the father is not. Following in his father’s footsteps, Lenard hopes that a few of his six children will go into the family business. “Television is my passion, and I hope it is for my children,” he commented. For Lenard, challenging 800-pound gorillas such as Univision and Telemundo will not be easy, but he seems to have all the answers. The first challenge is the revenue stream. While the big competitors rely on three-tier income (advertising, retransmission fee and program sales), LBI can only depend on ad sales. Even though LBI has some 6,000 hours of programming in the can, such sales –– both internationally and domestically –– have proven to be an arduous task for the group. “Our first goal was to create a network in order to take advantage of network sales,” Lenard explained. Now, LBI earns from national sales, both network and spot, as well as local advertising. “Our second stage [of development] is to collect some cable retransmission fees.” National sales for the network are being handled by LBI Media’s wholly-owned rep, Spanish Media Rep Team (SMRT). José Liberman’s Dream (Continued on Page 10) Bill Garcia, director of affiliate relations, at LBI’s local and national news studio in Burbank Lenard Liberman next to the statue of Adam Sanchez in LBI’s Burbank, California flagship station’s front entrance The hosts of Alarma TV, Liana Grethel and Jorge Antolin 9
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