MIAMI — Representatives from Hispanic media company Hemisphere Media Group and the nation’s largest Latino-focused multimedia entity, Univision Communications, have each declined to comment on a report in the Dec. 19 edition of The Wall Street Journal that suggests Hemisphere is one of three bidders for the company led by CEO Vince Sadusky.
According to WSJ reporters Benjamin Mullin, Miriam Gottfried and Cara Lombardo, “several firms” have expressed interest in acquiring Univision.
Citing “people familiar with the matter,” Hemisphere — which just reached a retransmission consent agreement with Dish Network restoring its networks to the DBS provider after a two-month absence — is one of them.
“I wish I had something for you but we aren’t commenting on the story,” a Hemisphere representative told RBR+TVBR.
Similarly, multiple Univision PR representatives in New York declined to comment on the report.
In addition to Hemisphere, which is traded on the Nasdaq Global Select exchange as “HMTV,” the Journal says private equity firm Platinum Equity is a Univision bidder. So is Wade Davis, a former Viacom CFO, the Journal claims. Davis’ rumored bid involves third-party financing and would reportedly see Davis unseat Sadusky as Univision’s chief executive.
Univision in July confirmed that it is “reviewing strategic options.”
Haim Saban’s Saban Capital Group and private equity firms Providence Equity Partners, Madison Dearborn Partners, TPG and Thomas H. Lee Partners in 2007 took Univision private in a deal with a total value of $13.7 billion.
It was ultimately a financial boondoggle for the private investment groups, which have been trying to bail on Univision for a lengthy period. This includes a failed Initial Public Offering attempt.
Hemisphere Media Group’s rumored bid for Univision could have credence, says one Hispanic advertising industry veteran.
That’s because of one individual who has served as Hemisphere’s Board Vice Chairman since 2013 — Jim McNamara.
McNamara is the founder of Panamax Films, a 15-year-old film production company that produces films for Spanish-speaking cinema patrons.
In 2008, McNamara joined Cine Latino as a consultant and in 2010 was named Non-Executive Chairman of Pantelion Films, a Latino Hollywood studio that is a partnership between Lions Gate Entertainment and Grupo Televisa, the Spanish-language media company with a long-standing programming agreement with Univision.
Prior to this, from 1999-2005, McNamara served as the President/CEO of Univision’s biggest rival, then-known as Telemundo Communications Group.
McNamara’s lengthy career in TV includes roles as President of production company Universal Television Enterprises, as CEO of New World, and led Film Roman from 1997 to 1999.
It is said that McNamara’s access to capital is what could fuel the reported bid for Univision by Hemisphere, which is primarily known for such channels as WAPA Televisión in Puerto Rico, Television Dominicana, and CineLatino.
What also makes the Hemisphere bid intriguing is that Sadusky was on Hemisphere’s board until 2018.
Who is behind Platinum Equity?
Look no further than Tom Gores, the billionaire who in 1995 founded the private equity firm.
It is best known for taking CBS Corporation’s European OOH business and creating “Exterion Media,” which was sold to U.K.-based Global in 2018. According to WSJ, Platinum Equity was among the bidders for the regional sports networks ultimately acquired by Sinclair Broadcast Group from FOX.
Meanwhile, Davis exited Viacom following its reunification with CBS.
UFORIC CONCERNS IN Q3
Univision’s Q3 earnings had one big blemish, and it’s the radio-fueled Uforia division, led by Univision Radio President Jesus Lara.
For the Uforia-branded Univision Radio division, Q3 2019 adjusted OIBDA slipped to $18 million, from $22 million. Core revenue was statistically flat, rising by $200,000 to $63.2 million.
Q3 ad revenue in the radio division fell 4%, to $60.4 million, non-political.
This led Univision in the third quarter to see a radio segment revenue dip 1.8% to $65.2 million, from $66.4 million.
The culprit? “Declines in ad spending in the automotive and financial sectors partially offset by food and other categories,” the company said in a release — the only mention of Univision’s radio stations made, even during analyst questions.
For 2020, Sadusky thinks Univision is in a great position to benefit from a strong political ad year. That said, Radio is a problem area putting a damper on solid overall growth for Doral, Fla.-based Univision.
Overall, Univision Communications’ Q3 revenue increased to $681.4 million, from $628.2 million.
Operating income grew to $195.4 million, $113.4 million. On a continuing operations basis, revenue jumped to $206.3 million, from $189.9 million.
This helped bring Univision Q3 net income of $77.4 million; that’s up from $12.4 million on a continuing operations basis.
However, it is very clear that Univision’s Media Networks are fueling the company’s revenue — not the 58+ AMs and FMs in the Uforia stable. Media Networks adjusted OIBDA moved to $260 million, from $228.8 million.
Revenue for the segment increased 9.7%, to $616.2 million from $561.8 million. Media Networks advertising revenue improved by 2.1%, to $322.4 million from $315.8
million. The improvement is primarily due to higher Digital advertising revenue.
With many Hispanic marketing and advertising industry professionals gathered in San Diego for the 21st annual ANA Multicultural Marketing & Diversity Conference, Deutsche Bank analyst Aaron Watts asked during Univision’s Q3 earnings call what the latest details were on Univision’s strategic review.
“It’s still ongoing … There’s nothing we can really say about it,” Sadusky responded.
That seems to be the case today, as company executives work behind the scenes to carve a path for Univision’s future.