Univision deal ups Universal's Latin-market clout

MIAMI (Billboard) - Sometime in the coming months, a single music label, Universal Music, will control almost half of the U.S. Latin music marketplace.

The shift follows Universal’s agreement to acquire Univision Music Group, the leading Latin music company in the United States. Univision, whose holdings include Univision Records, Fonovisa, Disa and La Calle, has a 35.9 percent share of the U.S. Latin market, according to Nielsen SoundScan year-end numbers. No other label has had that kind of market-share clout in the Latin realm.

Adding the U.S. Latin market share of Universal’s Latin labels -- Universal Music Latino and Machete, with 8.83 percent and 5.26 percent, respectively -- to Univision’s will place Universal’s Latin market share at 49.9 percent. It shouldn’t, however, drastically change the Latin landscape; Universal’s distributing arm, Universal Music Group Distribution, already controls more than 50 percent of the U.S. Latin market and has distributed Univision’s product since the inception of the label. In Latin America and Spain, Universal is consistently the No. 1 or No. 2 label in the market.

Univision Music Group was put up for sale last year, after Univision Communications was acquired by a private investor group.

Universal quickly emerged as the front-runner on a list of candidates; in addition to the Univision distribution deal, Universal Music Group chairman/CEO Doug Morris and president/COO Zach Horowitz have long expressed an interest in the burgeoning Latin marketplace and made strides to develop business in that market.

Universal/Univision talks stalled in past months, sources say, over discussions on the promotional role to be played by the Univision TV networks. Under the final agreement, the Univision networks will continue to provide promotional airtime to Universal artists, much in the way they did with Univision artists.

Founded by CEO Jose Behar in 2001, Univision Music has been the longtime U.S. Latin market-share leader. Previously head of EMI Latin, Behar was hired by former Univision Communications CEO Jerry Perenchio to create a music division as part of Univision’s media empire. Behar built the company from scratch, signing new and established acts and, later, acquiring leading indie Fonovisa Records, a regional Mexican music powerhouse. To this day, Univision’s top sellers are in the regional Mexican realm.

In turn, Universal’s forte has long been its pop division, with stars like Juanes, Enrique Iglesias and Paulina Rubio. More recently, the company has become an urban music leader via its upstart label Machete Music, whose roster includes reggaeton duo Wisin & Yandel.

Universal’s Latin operations are overseen worldwide by Jesus Lopez, chairman/CEO of Latin America and Iberian Peninsula. An industry veteran who has focused on restructuring his companies’ operations and who is developing new business models, Lopez will now oversee the joint worldwide operations of the two labels. Univision will continue to be run by Behar until the acquisition is complete.