Disruption is often in the news. But increasingly, the media industry itself is going through massive changes that have left some companies in dire straits—beginning long before the pandemic.
Such was the case for LBI Media, a privately owned Spanish-language TV and radio company based in Burbank, California, which filed for bankruptcy in November 2018. It was the end of a 30-year run that started when CEO Lenard Liberman and his father founded the company in 1987 and acquired two radio stations the following year. In the ensuing decades, they added 15 more radio stations and 10 TV stations to create a niche media empire. But changes in viewer habits and $530 million in debt finally became too much to handle.
“The industry is going through rapid change in how consumers consume content,” says Peter Markham, who took over as CEO in 2019. “Our mission now is to modernize.”
As a condition of the bankruptcy, LBI’s lenders agreed to a debt-for-equity swap that eliminated $350 million in debt by giving them ownership of the media company, which they rebranded Estrella Media.
“Emerging from bankruptcy is the day everything changes,” Markham says. “It’s a unique point in time when you have a blank slate and you can reset everything the company stands for.”
He notes that it is one of the few times in any company’s history where stakeholders expect massive change to occur. “It’s unlike anything that an executive will ever experience otherwise.”
For Markham, who has spent his career overseeing corporate turnarounds, the primary goal is to stop thinking of Estrella as a TV and radio company and to start treating it like a content producer. The elimination of debt means the company has the resources to make big changes, which include streaming content to multiple digital platforms simultaneously, training staff on how to leverage new technologies and working more closely with the community.
“It’s a big change of direction for the staff,” Markham says. “But employees are embracing it. They now have the resources and training to thrive in this challenging atmosphere.”
It’s a unique point in time when you have a blank slate and you can reset everything the company stands for.
— Peter Markham
CEO Estrella Media
A big part of the transformation includes taking a community-first approach to business in Estrella’s content and philanthropy. This has meant increased reporting on immigration issues, which are top of mind for the company’s customer base, and a partnership with the Multi-Ethnic Media Coalition to raise awareness about the census process through public service announcements.
Markham believes that a platform-agnostic approach, coupled with a corporate culture that empowers employees through training, tools and the freedom to do their work without being micromanaged, will breathe new life into the media company.
It’s also helping them deal with the chaos caused by coronavirus. “While COVID has presented many challenges for our business, our company and culture have been strengthened by how we have responded, as a team, to the pandemic,” Markham says.
His staff has had to rethink every aspect of business operations, deploying technology in new ways and pivoting how they bring new products to market.
“We’ve had to change the way we work together and create content for our community, all with the health and safety of our team members as a top priority,” Markham says.
In response to global lockdowns and social distancing, his team created the “Safe Set” concept for competition shows and concerts, which aims to keep talent safe while allowing a virtual live audience to participate.
In addition, Estrella launched the #SiSePuede (Yes We Can) community empowerment and awareness initiative to provide an expanded hub for information and resources, and encourage the community to come together during these trying times. “We felt it was important to have a unifying rallying cry for our audience and our employees,” Markham says.
Looking to the Future
It’s still early in Estrella’s reinvention, but Markham is already seeing an expanding audience and increasing ad sales. “Turnarounds never go as fast as you’d like them to,” he says. “But these positive signs show we are going in the right direction.”
Photo by Piranka/Getty Images
Then & Now
The old way: Authoritarian leadership, a culture of secrecy and poor communication
The new way: A democratic process, transparency and a focus on team member morale
Action items: Estrella's new CEO created a video to reintroduce the company, which was distributed via the company's internal social media platform. Estrella also implemented a number of changes, including:
Holding weekly management meetings
Prioritizing employee engagement and seeking the staff’s input
Planning team-building events, including holiday parties
Improving benefits to include maternity and paternity leaves and floating holidays