A top Univision Communications executive on Thursday said the Spanish-language broadcaster amended its senior credit facility to buy time for the U.S. advertising market to recover, and added that the slide in ad sales appeared to be over for now.
Privately held Univision, the top Spanish-language media company in the United States, said on Thursday its lenders had agreed to amend the company’s senior secured credit agreement to relax the financial covenants used to calculate EBITDA.
The company undertook the changes “to create a better profile for us until the ad market comes back and to take the pressure off our liquidity requirements,” the Univision executive, who asked not to be named because of company policy governing public statements, said.
The network expects to outperform media industry analysts’ forecasts for a 10 to 20 percent drop in this spring’s upfront advertising sales, year over year, the executive said.
Univision, which also operates the TeleFutura and Galavision television networks, has started to see glimmers of improvement in advertising sales over the past two months, the executive said.
“Over the past two months we have seen a substantial reduction in the rate of decline (in ad sales), year over year,” the executive said. “The spending decline has come to a halt over the last eight weeks.”
Some new advertisers have picked up slack left by the ailing auto industry, and Univision is “waiting to see” how the sale of Chrysler to Fiat and the government-brokered bankruptcy of General Motors will affect those companies’ marketing budgets, the executive said.
The amendment to the company’s senior secured credit agreement is conditioned on the payment of an amendment fee to revolving lenders who consent to the changes on or before June 16 and on the repayment of $150 million outstanding on the revolver, according to a securities filing.
Univision also confirmed that it has completed more than 100 multi-year distribution agreements with satellite, cable and telecom providers, and now expects to receive more than $175 million in additional subscriber fees in 2009.
Univision Chief Financial Officer Andrew Hobson said in May those revenues would come in above $100 million.
Those fees are expected to more than double over the next three to five years, a Univision spokesperson said.
Since the beginning of 2009, Univision has inked distribution pacts with Comcast Corp, Time Warner Cable Inc, EchoStar Corp’s DISH Network, News Corp’s DirecTV, AT&T Inc and Verizon Communications Inc.