Anecdotally, Univision Communications should have suitors lining up to kick its tires since it announced July 3 that it is for sale. After all, Hispanic Americans are 20 percent of the U.S. population and the nation’s second-fastest growing segment, according to Claritas, a marketing firm. Each Hispanic household will spend $2.5 million in a lifetime, about $539,000 more than the average white household, a statistic that whets the appetite of savvy advertisers.
The U.S. Hispanic audience “represents one of the very few certain growth opportunities in today’s media,” Univision crowed in its July 3 statement confirming that its board “is reviewing strategic options.”
Nonetheless, a deeper dive into Univision’s financials might indicate it will be difficult for its private investors — including Thomas H. Lee Partners, Providence Equity Partners and Madison Dearborn Partners — to make much of a profit on their $12.3 billion purchase in 2007.
Univision dominated the market back then, but Telemundo, owned by Comcast’s NBCUniversal, has been gaining ground for years, especially with its telenovelas that are attracting younger viewers than are Univision’s. Plus, President Donald Trump’s tough talk on immigration has made investors nervous. Those issues helped derail multiple efforts to take Univision public, while falling revenue (down 8 percent to $612 million in the first quarter) and operating income (down 20 percent to $204 million) haven’t helped matters.
Still, Haim Saban, a Univision board member and CEO of Saban Capital Group, which also has a stake in the firm, is spending time in Sun Valley, Idaho, at the private Allen & Co. gathering of media moguls that began Tuesday, and he’ll likely be pitching Univision to multiple conglomerates, including Disney, should he run into CEO Bob Iger.
“Easily the most logical and sensical of the purchasers of Univision would be Disney,” says Jimmy Schaeffler of the Carmel Group. Univision’s audience “will not only buy your content wares, but will attend your theme parks, especially in Spanish strongholds, such as Florida and Southern California.”
Univision, in fact, recently moved its headquarters from New York to Miami where the bulk of its 4,000 employees work. “Univision By Disney would be a brilliantly strategic move on the part of the folks in Burbank,” says Schaeffler. “No other potential buyer has quite the gravitas combined with quite the need.”
But Disney is still digesting its $71.3 billion acquisition of most of 21st Century Fox, so it might not have the appetite for Univision. Thus, Saban might have more luck with Shari Redstone, who is attending Sun Valley at a time when CBS and Viacom, both of which are controlled by her and her father, Sumner, are considering a merger, and some on Wall Street speculate the combination might still fall short as conglomerates grow their power, as did WarnerMedia when AT&T scooped it up for $108.7 billion, including debt. Adding Univision to the CBS-Viacom mix might be just what the doctor ordered.
Fox Corporation, made up of the assets Disney didn’t purchase and led by CEO Lachlan Murdoch (also in Sun Valley), might be attracted to Univision for its news and sports, especially since it is set on July 20 to relaunch Univision Deportes Network as TUDN, a multiplatform outlet that will focus on soccer and other sports appealing to Hispanics.
Under former CEO Randy Falco, Univision had been amassing English-language digital assets like the Onion and Gizmodo Media, but in May 2018 Vincent Sadusky replaced Falco and quickly sold off those businesses for a loss, probably in preparation of a sale to a conglomerate in need of a subsidiary narrowly focused on Spanish speakers.
An insider with knowledge of the process says Univision seeks a “strategic acquisition. It’s an asset suited for a larger business with scale. There were some bumpy times, but the management team has been reset and a carriage dispute with Dish Network has been settled after a nine-month blackout. Univision recently completed its best upfronts in four years. This is the right time, for the right company, in the right marketplace.”