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Execs have eyes on Cuba
Jose Cancela wants to turn Cuba's state-run media into a profit-making enterprise.

The Miami-based Hispanic media consultant said he has lined up about $1 billion in pledges from potential investors to buy into Cuban television and radio markets once Fidel Castro leaves power and a democratic government takes over.

''We believe it is an area that will develop very quickly,'' Cancela, president of Hispanic USA, told an audience gathered in Coral Gables to hear the results on a new poll about South Florida investment in a post-Castro Cuba.

The survey, commissioned by South Florida CEO magazine, found most business executives in the area planned to invest in a democratic Cuba. Almost 65 percent of the 417 executives polled said they were likely to do business in a post-Castro Cuba, a consensus the poll's architect said was particularly noteworthy since most of the respondents were non-Hispanic.

''There has been a consensus over the last 25 years that only Cuban Americans care about Cuba. This may very well be one of these issues that unites this community,'' said Sergio Bendixen, president of Bendixen & Associates, the Coral Gables pollster that conducted the survey.

The poll found some trepidation about the island of 11 million people just 87 miles from Key West coming into its own economically. Of those polled, 72 percent industry would be ''negatively impacted'' by a democratic Cuba, and 32 percent thought real estate would be hurt too, and 22 percent said local agriculture would suffer.

Still, 61 percent of those surveyed thought a democratic Cuba would impact their industry positively; only 11 percent thought it would hurt their own business.

BUILDER INTERESTED

Sergio Pino, a leading home builder in South Florida, said he was ready to expand his operations into Cuba once Castro was gone. He said his company, Century Homebuilders, and Lennar, a national builder based in Miami, are even helping draft building codes that could go into place once Cuba becomes an open market.

''I dream about the moment when I can go back and help my Cuban family and help my Cuban brothers rebuild Cuba,'' the Cuban-born Pino said.

But American investors, barred by U.S. law by doing business in Cuba, would face competition there from foreign companies already operating there, particularly those from Canada and Europe. Asked by an audience member what effect that competition would have on U.S. businesses, Pino said he hoped a post-Castro government would punish those doing business with the old regime.

''Those Europeans and Canadians invested in a country that doesn't care about their people,'' he said.

Philip Peters, who studies Cuba for the Lexington Institute think tank, doubted current Cuban investors would lose their foothold once Castro departs.

''I've spent a lot in time in Cuba, but I've never detected hostility toward foreign investors,'' said Peters, noting that Cubans working in foreign-backed businesses generally earn more than other Cuban workers.

Jumping into the Cuban media business might let the Cuban-born Cancela avoid one of the thorniest issues likely to confront other American investors -- property rights, said Florida International University economics professor Jorge Salazar-Carrillo.

While Cuban exiles expect a thicket of legal complications over claims of farmland and homes currently occupied by Cuban citizens, the government still owns the country's television and radio stations. Salazar-Carrillo said a new government would probably auction off at least some of the stations to raise money.

''I think it's one of the easiest sectors to get into,'' he said.

Cancela said he recently formed a company for the would-be media venture, Sunrise Communications, which would probably seek to purchase broadcast stations there or buy some other access to the airwaves.

INFRASTRUCTURE THERE

He said Castro controls an impressive broadcast empire: The country has four island-wide television networks, 16 regional television stations, and between 70 and 90 radio stations.

''The infrastructure is in place,'' said Cancela, a former Univision and Telemundo executive who was also president of Radio Unica when it went bankrupt in 2003. He predicted that within seven years, Cuban media could grow into a $900 million industry.

But Peters, the Lexington Institute analyst, said Cuban media holdings may not be the cash cow Cancela expects.

''In that business, you're blazing a trail because there's no paid advertising in Cuba right now,'' Peters said. ``Is there enough purchasing power in the market to support that?''
16 Oct 2005 by admin
The Havana Journal



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