Around the State- Southeast- Oct. 2000
The upstart daily El Nuevo Herald is upstaging
its big brother with its rapid growth.
By David Villano
Three years ago, some Miami Herald officials were reluctant to spin off the paper's Spanish-language supplement, El Nuevo Herald, as an independent daily. Why create new competition for readers? Why further splinter a community already divided along ethnic lines?
Today they're asking why they waited so long. Barely 21¼2 years after its launch as a stand-alone, El Nuevo Herald is among the fastest-growing newspapers in the nation and the fastest-growing in the Knight Ridder chain. Circulation increased 7% in 1999 (compared with an industrywide average of 0.2%), with a projected 8% jump this year. It is now running neck-and-neck with Los Angeles' La Opinion as the largest Spanish language daily in the nation. Ad revenues are equally strong, rising 6.4% last year to $26.4 million.
And with revenues through July nearly 2% over company goals, officials project a whopping 32.3% profit margin for year-end 2000. By comparison, most dailies are thrilled by anything over 20%.
El Nuevo was born in 1975 as a sampling of news, sports and feature articles, mostly translated from the main paper, and packaged into a pullout section. But in 1995, in-coming El Nuevo Publisher Alberto Ibarg?en reasoned that Latin readers would never fully embrace a paper that treated their primary language as second class. He asked that the supplement be produced and sold independently. In May 1998, Ibarg?en got his wish.
Ibarg?en, who moved over to the Miami Herald publisher's seat just months later, brought in veteran Latin journalist Carlos M. Castañeda to lead the new paper. Under his direction, El Nuevo Herald revamped its layout with a bolder, brighter, tabloid look that set it apart from its only Spanish-language competitor, Diario Las Americas. Street sales now account for about 30% of its circulation -- far greater than the industry average of 15.7%. An emphasis on street sales, says Castañeda, allows it to capture much of the market for tourists and other travelers from Latin America.
The paper also has found a niche serving the immigrant population. University of Miami journalism Professor Ileana Oroza, a 22-year Miami Herald veteran, says of El Nuevo Herald: "This is a paper that has a clear sense of what it wants to do and how it needs to go about doing it."
To be sure, El Nuevo Herald's success has not been solely at the Miami Herald's expense. Before the spinoff, the Miami Herald sold about 350,000 weekday papers. Today, the combined circulation of the Herald and El Nuevo is about 415,000 -- 327,000 and 88,000, respectively.
Castañeda says his objective is to compete with the Miami Herald for news, not readers. "I'd like to think readers in Miami will want both," he says. He isn't as kind in his assessment of family-owned Diario Las Americas, decidedly more traditional. "Every time another Cuban dies, their circulation goes down by one more," he quips.
Of course, Diario Publisher Alejandro Aguirre doesn't see it that way. He says his paper targets older, more conservative readers. That strategy, he insists, is helping circulation hold steady at about 70,000. "We serve a function that needs to be served," says Aguirre.
In the News
Delray Beach -- Newly arrived Office Depot CEO Bruce Nelson continues his management shuffling with the announcement that Shawn McGhee, North America division president, will resign. In July, longtime CFO Barry Goldstein announced his retirement. While Internet sales have been strong for the nation's largest office supply retailer, Office Depot (NYSE-ODP) has been losing favor on Wall Street for disappointing revenues. Earlier in the year, officials said the company would slow expansion by about 20%, to perhaps 100 store openings over the coming year.
Juno Beach -- FPL Group (NYSE-FPL), the parent company of Florida Power & Light, will merge with New Orleans' Entergy Corp., creating the largest electricity supplier in the nation. The new company, which will serve 6.3 million customers in five states, will be based in FPL's current facility in Juno Beach. While analysts expect layoffs, no plans have been announced.
Miami -- Miami-Dade County has granted $500,000 in tax refund incentives to four companies looking to expand their local operations. The four: Internet access firm Terra Networks USA, drug maker Watson Laboratories, phone service provider Allegiance Telecommunications, and Internet services company Digitas. The expansions are expected to create 500 jobs and produce more than $70 million in capital investment.
Amid mounting financial losses, a sinking stock price and a flurry of shareholder lawsuits, UniCapital Corp. (NYSE-UCP) founder and Chairman Robert New and COO Edward Jaeckel have stepped down. Corporate turnaround specialist E. Talbott Briddell is interim CEO. The Miami-based equipment-leasing company also cut 38 jobs and reduced the salaries of 11 senior employees.
UniCapital reported a first-quarter loss of $276.6 million, or $5.04 a share, mostly because of its big-ticket leasing division. The company stock was trading at 16 cents a share in early September, down from a high of $19 in 1998.
Following the lead of fellow German automakers Mercedes-Benz and Volkswagen, Porsche has established a Latin American headquarters in Miami. Until now, the company's Latin American markets had been serviced from Ludwigsburg, Germany.
Burger King announced it will set up its world headquarters in west Miami-Dade in 2002. Two years ago, economic development officials launched a fierce lobbying campaign to keep the company after it announced plans to flee its south Miami-Dade site. Earlier this year a deal to move to downtown Coral Gables was all but sealed before other suitors sweetened their offers. The new 230,000-sq.-ft. headquarters will be at the Waterford office park near Miami International Airport.
Miami Beach -- Following its acquisition of nearby Miami Heart Institute, Miami Beach's Mount Sinai Medical Center has announced it will reduce its combined workforce by 190, or about 6%. Nearly all of the cuts will be in administration and facilities service departments. Both institutions have struggled financially in recent years. A year ago, Mount Sinai laid off 125 of its 2,800 employees.
Miami-Dade -- Cargo airline Atlas Air plans a $37-million expansion at its Miami International Airport facilities. The expansion, which will include a wide-body aircraft maintenance hangar, is expected to create at least 400 jobs over the next three years. Atlas currently employs 120 locally.
South Florida -- The number of Hispanics in south Florida continues to skyrocket, according to recently released estimates from the U.S. Census Bureau. From 1990 to 1999, the number of Hispanic residents in Broward and Palm Beach counties increased 77% and 71%, respectively. While Miami-Dade's Hispanic population rose just 30%, that ethnic group now accounts for more than half -- 57% -- of the county's 2.1 million total. Meanwhile, Miami-Dade's non-Hispanic white population continues to decline, dropping 88,000 during the same period.
West Palm Beach -- Bowing to increased pressure from low-cost startups Spirit Airlines and JetBlue, Trans World Airlines will discontinue service to Palm Beach International Airport in December. The St. Louis-based airline has four daily flights from West Palm Beach, three to the hotly contested New York City market. Officials say that all18 employees affected by the decision will be offered positions in other cities.