Univision Buyer Says Spanish-Language Giant Is ‘Most Attractive Traditional Media Business Today’
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Former Viacom chief financial officer Wade Davis didn’t waste any time after exiting the company last year amid the musical chairs in senior management as Viacom and CBS Corp. prepared to merge. Two months after hanging out his ForgeLight LLC investment shingle, Davis has reached a deal to acquire a majority stake in Univision,
“When I look at Univision, there’s no question in my mind that it’s the most attractive traditional media business today,” Davis told Variety. “It’s focused on a large demographic that is growing faster than any other demographic in the United States. And it’s incredibly relevant from a cultural standpoint.”
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Financial terms of the deal were not disclosed. ForgeLight and partner Searchlight Capital Partners are acquiring the 64% stake held by Haim Saban’s Saban Capital, Madison Dearborn Partners, Providence Equity Partners, TPG and Thomas H. Lee Partners. Mexican media giant Televisa retains its 36% interest and extended its long-term program license agreement to provide much of the programming carried by Univision’s mothership channel, the Uni Mas network and cabler Galavision. The company had been valued in its entirety at around $10 billion, including $7.3 billion in debt, most of which was loaded on to the balance sheet when the Saban consortium acquired Univision in 2007.
Univision has long been the dominant Spanish-language media company in the U.S. But it has lost significant market share to rival Telemundo, which has benefited from investment from parent company NBCUniversal during the past decade. Univision has a longstanding pact with Televisa means that its scripted programming is focused on telenovelas made for Mexican audiences. Telemundo has made strides with a focus on edgier programs aimed at younger viewers and U.S.-born Hispanics.
Davis noted that his experience at Viacom in recent years gave him insight into what it takes to re-position long-established TV assets for a new era. He emphasized that Univision has an invaluable level of brand awareness and trust among Spanish-speaking consumers in the U.S. He would not cite specific plans for programming or management changes, given that the deal is still months away from closing. He asserted the company that ForgeLight stands to inherit is in good shape and poised for growth. Davis intends to take over as CEO.
Davis praised the current management team at Univision, asserting that the company “has done an amazing job driving a reinvention around its programming strategy,” adding more news and a wider variety of entertainment programming.
Most significantly, Univision under the leadership of CEO Vince Sadusky has completed retransmission consent and carriage deals with all of its major MVPD distributions. That provides a long runway of predictable affiliate fee revenue for the new owners, although the rate of consumer defections from traditional MVPDs could cut into Univision’s forecasts.
Davis characterized the deal terms for Univision’s renewals as strong, despite Univision’s ratings struggles. “There’s lots of incremental opportunity to build on top of the most stable distributor platform in the industry,” he said.
Univision launched the Univision Now subscription streaming platform in 2015. But it’s expected that the change in ownership will generate a more expansive streaming strategy for the company. Davis said specifics will come down the road after the transaction is completed.
The chance to “launch a differentiated service for this audience against a competitive landscape that is completely open — we view that as a huge opportunity,” Davis said. “When you look at this marketplace there is no dedicated, high-quality OTT service at scale in Spanish-language (media).”
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