Spanish-language media giant Univision Communications on Thursday said it swung to a fourth-quarter loss amid lower revenue, including from a carriage dispute with Dish, and higher expenses, as well as higher impairment losses.
The company’s financials continued to be affected by a carriage dispute with Dish Network and the resulting lower viewership despite recent ratings improvements. The company also recently had a step-up in the rate it pays Mexican TV giant Televisa under a long-term content deal.
“Hispanic America is driving population and GDP growth and will continue to do so for decades,” said CEO Vince Sadusky, who last year took over from Randy Falco. “Our strategic focus on serving this core audience has recently resulted in viewership growth, as from the third to fourth quarter, we saw increases in our primetime ratings in all key demographics at a time when all other major networks experienced declines.”
He added: “Our ratings resurgence was fueled by a more diversified, modernized programming lineup, which has provided Univision with a powerful springboard in 2019 to offer our distribution and advertising partners even greater value.” Sadusky previously promised a “singular focus on our core business and mission.”
Univision on Thursday reported a fourth-quarter loss from continuing operations of $40.2 million, including a non-cash pretax impairment loss of $106.0 million due to the writedown of radio broadcast licenses and restructuring/severance charges worth $8.1 million. That compared with a year-ago profit of $390.0 million, which included more than $400 million in one-time gains, a non-cash pretax impairment loss of $85.6 million and $30.4 million in restructuring/severance charges.
Quarterly adjusted operating income before depreciation and amortization, another profitability metric, dropped 34 percent to $229.0 million.
Fourth-quarter revenue dropped 8.9 percent to $688.5 million, with core advertising revenue down 9.4 percent to $372.3 million. A portion of Univision’s decline in TV networks advertising revenue “was attributable to the non-cash impact of audience guarantees from viewership declines,” the company said. “These audience guarantees are expected to be fulfilled in subsequent periods and, excluding the effect of these audience guarantees, media networks’ advertising revenue for the fourth quarter 2018 would have been comparable with the same prior period.”
Non-advertising revenue, including carriage fees and content licensing, fell 7.6 percent to $286.7 million in the fourth quarter.
Meanwhile, operating expenses rose, driven by newly acquired UEFA soccer rights, an increased number of Mexican soccer league matches and the higher Televisa licensing fee. Direct operating expenses jumped 11 percent to $287.6 million, with selling, general and administrative expenses up another 11 percent to $176.5 million.
Univision last year cut jobs, scrapped plans for an initial public offering and replaced its CFO. Over the summer, it also tapped Morgan Stanley to explore the sale of its former Gawker assets, which include the Gizmodo Media Group and The Onion. Univision said Thursday that the results of the English-language digital businesses have been excluded from its continuing operations. The firm said its loss from discontinued operations, net of income taxes, for the fourth quarter amounted to $32.5 million, compared to $3.0 million for the same period in the year-ago period.
This article was originally published by The Hollywood Reporter.