Telemundo invests in its future with a new high-tech HQ
Entering the gleaming new white-and-blue Telemundo Center is a little like stepping into the future — and not just because the inside of the building feels like a spaceship.
The three-story building is comprised of 476,000 square feet — the size of seven soccer fields — of sleek work stations, minimalist decor, open spaces and high-tech production stages and sets. The building is also a physical manifestation of the forward-thinking approach Telemundo Enterprises is taking toward the turbulent Spanish-language TV and media industry.
At 10:30 a.m. Monday, Miami-Dade County Commissioner Jose “Pepe” Diaz will inaugurate the $250 million Telemundo Center, located in the Beacon Lakes Industrial Park in west Miami-Dade. The street out front will get a new name: “Telemundo Way.”
But the building, which broke ground in early 2016 at Northwest 117th Place and 25th Street, is more than just a shiny new headquarters. The investment is a vote of confidence — both in the future of an industry buffeted by layoffs and restructuring, and in the viability of this burgeoning commercial center in west Miami-Dade.
For Telemundo Enterprises, whose staff had been previously scattered around various locations around the county (including dingy studio facilities in Medley and Hialeah), the building symbolizes an embrace of the digital revolution that has disrupted the traditional television landscape.
“NBC Telemundo is focused on creating the future media company for the evolving Hispanic media consumer in the U.S.,” said Cesar Conde, chairman of NBCUniversal International Group and NBCUniversal Telemundo Enterprises. “Our primary focus is creating premium content for Hispanics in the U.S. and around the world. We’re investing in creating that media company of the future.”
Although construction on the TV news, sports and production soundstages is still ongoing, around 800 employees from several of NBCUniversal Telemundo Enterprises’ various divisions —including the Telemundo Network, Telemundo Digital Media and the distribution arm Telemundo Internacional — have already moved into the sleek new digs.
When production facilities are completed this summer, Telemundo Center will house 13 production studios (including two big enough to accommodate live studio audiences) and two digital production spaces for multimedia content. The building will generate an average of 3,000 hours of content per year, including news, sports, daytime and scripted programming.
The race for No. 1
The futuristic headquarters marks the latest growth spurt by Telemundo Enterprises. Launched in 1987 as a clutch of five independently-operated TV stations scattered around the U.S., Telemundo has since been purchased by deep-pocketed Comcast Corp. and NBCUniversal. Telemundo now produces its own programming geared directly at U.S. Hispanics, filmed at its studio facilities in Miami, Mexico and Colombia.
By veering away from traditional telenovelas and making episode shows with timely themes such as drug smuggling and immigration, Telemundo has gradually eroded the ratings advantage rival Univision has long enjoyed. Five years ago, Univision averaged 1.86 million prime-time viewers ages 18-49 — more than double Telemundo’s .781 million, according to Nielsen’s figures for the 2012-2013 season. In the current 2017-2018 season, Univision’s lead has shrunk to 45,000 viewers.
As a consumer demographic, U.S. Hispanics have become an economic powerhouse. The 55 million Latinos living and working in the U.S. in 2015 produced a gross domestic product of $2.13 trillion, according to the Latin Donor Collaborative. That is more than the GDP of India, Italy, Brazil or Canada, and only slightly less than the GDP of France or the United Kingdom.
“We have this incredible tsunami that’s occurring in the U.S.,” Conde said. “The U.S. Latino population has gone from being a demographic story about size to being an economic story. This community has exploded from the perspective of its purchasing power. That makes us look at the future in an optimistic way.”
In its year-end 2017 report, Comcast Corp. reported a total annual revenue of $84.5 billion, a 5.1 percent increase over 2016. The company does not report Telemundo’s financials separately. But a recent Wall Street Journal story quoting S&P Global Market Intelligence placed Telemundo Network’s net operating revenue in 2017 at $844 million — a nearly 50 percent increase since 2014.
“Telemundo was very timid in the past,” said Alejandro Alvarado, director of the Spanish-language Journalism Masters program at Florida International University’s Biscayne Bay Campus. “They were happy being Number Two. But that changed after being acquired by NBCUniversal and Comcast. Their bosses said, ‘You have to be Number One.’ And Hispanic millennials now have the choice to consume good content in English or in Spanish. They prefer genre [action, thrillers, suspense]. Univision was reluctant to change and remained confident that their Mexican telenovelas would keep working. But they don’t work for the new generation.”
Univision Communications, which remains the largest Spanish-language media company in the U.S., has been making changes of its own to keep up with the times, such as partnering with Facebook to make short-form comedy shows for online consumption and co-producing the crime series “El Chapo” with Netflix. But the company appears to be struggling financially. Last month, Univision nixed its plan for an IPO offering that had been in the works since 2015. CEO Randy Falco has announced his retirement, and a consulting firm has been hired to review the company’s business to identify potential cost-cutting. Both Telemundo and Univision recently resorted to layoffs.
But Telemundo is also spending. In 2011, the company paid $600 million for the rights to air the 2018 and 2022 FIFA World Cups, snatching the ratings blockbuster away from Univision. Telemundo Deportes will generate 500 hours of World Cup-related coverage, which will be used via broadcast and digital outlets.
Last year marked the launch of Telemundo International Studios, a new division of the company that will focus on what Conde described as “high-quality, premium, short miniseries” — the kind of content that can reap dividends on Netflix or Hulu long after they’ve aired on broadcast TV.
“Companies must evolve to the changing tastes of consumers,” said Marisa Calderon, the executive director of the National Association of Hispanic Real Estate Professionals. “Spanish-language media have to deal with this in a more immediate way than other networks because they’re a niche market. Hispanic millennials will sometimes consume Spanish-language content by choice, if the content is something they’re interested in. But overall, U.S. Hispanics aren’t consuming their television and news through cable options.”
The local impact
The completion of Telemundo Center also activates a new phase in the evolution of Beacon Lakes Industrial Park. The 478-acre master-planned commercial development west of Doral is owned and operated by Prologis. It runs from Florida’s Turnpike west to 137th Avenue, between Northwest 12th and 25th streets.
The industrial park began as a joint venture between AMB Institutional Advisors and developer Armando Codina, who successfully petitioned Miami-Dade County to push the Urban Development Boundary westward in 2002 in order to build the industrial park.
In 2011, AMB merged with the industrial real estate developer Prologis, which then acquired Codina’s stake in Beacon Lakes. Companies with large facilities in the park include Amazon, UPS, Ryder Logistics and Goya. But retail and service-oriented businesses in the zone are scarce, forcing tenants to travel east to Dolphin Mall, on the other side of the Turnpike.
That will change now that 1,200 Telemundo employees start commuting in and out of the area on a daily basis. A block of 495,000 square feet of retail, extending south of the Telemundo building to Northwest 12th Street, is scheduled to break ground in the third quarter of 2018.
According to a Miami retail broker, who spoke on condition of anonymity, some of the tenants scheduled to sign leases within the next 60 days include Dick’s Sporting Goods, Bed Bath and Beyond and Home Depot, as well as a gym and restaurants. A Topgolf driving range is already under construction just south of the Telemundo building.
“The identity of Beacon Lakes Park is a world-class industrial development that caters to the supply-chain logistics community,” said Brian Smith, the former executive director of industrial brokerage at Cushman & Wakefield who represented NBCUniversal Telemundo when it signed the new lease. Smith now represents Prologis as managing director at JLL. “Now it will have a second personality by having a world headquarters and a retail section. The real focus of Beacon Lakes is industrial, but the retail component will enhance the experience for the tenants.”
Because Beacon Lakes is an industrial park, where 18-wheelers seem more plentiful than ordinary cars, the concept of selling furniture and shower curtains in the area might seem odd. But analysts say the addition of Telemundo to the development, along with other corporations that could follow, will create a captive audience for retail and restaurants.
The edge of civilization
“On the surface, it makes no sense whatsoever, because Beacon Lakes feels like it’s on the edge of civilization: There’s nothing there,” said Jason Shapiro, managing director of Aztec Group, a real estate investment and merchant banker. “But you’re going to have thousands of employees going in and out of the area who can do things they might otherwise do on the weekend, like run to Home Depot or buy clothes or whatever. With the retail industry so sluggish, you have to focus on location and micro-location. Putting retail there makes perfect sense.”
The Telemundo Center, which spans 21 acres, sits on a 37-acre parcel of land owned by Sun Trust Equity Funding, which also owns the building. NBCUniversal signed a 20-year lease for the location in February 2016.
The cost of the building was subsidized by several government incentive and abatement programs. They include a $3 million property tax refund from the Miami-Dade County Targeted Jobs Initiative Fund, which is paid out over six years based on the creation of 10 jobs and investment commitments; a $5.5 million High Impact Performance Incentive from the state of Florida; and a capital tax investment credit through the support of the Beacon Council, Miami-Dade County, Enterprise Florida and Florida Gov. Rick Scott’s office.
Telemundo executives said as of March 2018, the new building had already generated 3,400 construction jobs and $475 million in sales for Florida business. The company predicts it will contribute at least $360 million in Florida taxes over the next 20 years.
Telemundo has also launched a new multimedia educational program, which will allow 30 high school students to get hands-on experience and training for media careers over a 16-week course. Pitbull’s SLAM Miami High School and the Doral Academy are participating in the first edition of the program, which will launch this spring.
“We want to create a sense of community here, internally and externally,” said Monica Gil, executive vice-president of NBCUniversal Telemundo Enterprises. “When you walk into this building, throw out your perception of what you thought about Hispanics in this country. This is what we are and we want the world to know about it. There’s a sense of pride here.”