Newspaper Struggles for Survival : Spanish-Language El Diario Feels Strain of Competitive Market

When El Diario de Los Angeles made its debut as the city’s third Spanish-language daily newspaper in May, 1987, its Mexican owners had high hopes. By winning over the area’s large Latino community with a heavy dose of features and color photos, the investors expected to break even within a year.

But two weeks ago, El Diario’s current chief executive told the remaining staff that he expected the paper--which had already filed for bankruptcy--to fold permanently. “We don’t have the money to pay you,” said Armando Guerra. “We don’t even have money for materials.”

A last-minute surge of advertising saved the paper, but its survival is far from guaranteed. Guerra, El Diario’s director of planning and development, said employees are working without pay, the paper is losing $60,000 monthly, and it needs to raise a substantial investment by the end of September to keep publishing.

Besides trying to raise cash from Mexican and American investors, the paper--in a move that symbolizes its financial plight--has even appealed to its readers for help. A large full-page ad sponsored by a muffler repair chain tells readers in Spanish: “Support the Campaign. Save El Diario!”

A disc jockey on a Los Angeles area Spanish-language radio station has encouraged listeners to buy the paper and a recent musical event in Gardena was aimed at winning further reader support.

“It’s promotional,” said Guerra, a 20-year veteran of Los Angeles area Spanish-language newspapers and television stations.

Hurt by Devaluation

“Moneywise, we don’t expect anything big. We are trying to get more advertising. We are asking people to ask for the paper at the newsstand.”

Guerra says the Mexican investors of El Diario did not understand the local market and underestimated the financial demands of operating in a competitive market.

El Diario--which Guerra says has a circulation of about 30,000--competes against La Opinion, Los Angeles’ largest Spanish-language daily, and Noticias del Mundo, owned by a company controlled by the Rev. Sun Myung Moon’s Unification Church.

El Diario used heavy amounts of news from Mexico and the rest of Latin America and paid little attention to local news or personalities, says Guerra, who beefed up local coverage after being hired a year ago.

“I don’t care what happens to sports stars in Mexico,” he said. “I care about what happens to Fernando Valenzuela here.”

Mexican investors were also hard-pressed to cough up more cash to pay for promotions, news racks and ongoing operations after successive devaluations of the Mexican peso.

‘Four Kids to Support’

“We don’t have the cash flow to support the operation,” said Guerra, who estimated that he needs $100,000 a month to ensure the paper’s long-term survival. “You have to invest money to get results.”

But some El Diario employees are not too optimistic about the paper’s chances.

“I don’t think I will return--I have four kids to support,” said former editor Pedro Valdivieso, who has not seen a paycheck for more than a month. “I think El Diario does not have any other way out but to go out of business.”