By Adam R Jacobson
RBR + TVBR
DORAL, FLA. — The sale of the three radio stations in El Paso by Univision Communications, which the Hispanic and millennial-focused company quietly made via an FCC filing on Thursday, will bring $2 million to the Doral, Fla.-based TV and radio station owner.
It’s much-needed cash, as the company suffered a bruising third quarter as an initial public offering continues to become less likely in 2016, which the company said it hoped would happen in April.
Total revenue for Q3 dipped 8.3%, from $801.5 million to $734.8 million.
After adjusting the numbers for comparability by excluding major soccer event advertising, political/advocacy advertising, and content licensing; 2016 deferred revenue associated with support services provided to Fusion Media Network prior to its acquisition of The Walt Disney Co.’s investment in the millennial-focused digital-first entity; and 2015 revenue associated with the concurrent use of adjacent spectrum in one of Univision’s existing markets, Q3 revenue decreased 1.7%, from $710.4 million to $698.5 million.
This resulted in a net loss of $30.5 million, compared to net income of $109.8 million for Q3 2015.
The net loss included a non-cash impairment charge of $199.5 million primarily related to the write-down of radio broadcast licenses, compared to a non-cash impairment charge of $19.5 million included in net income attributable to Univision for Q3 2015.
Advertising revenue was a sore spot, with dollars dipping from $517.7 million to $477.8 million — a clear sign that political candidates did not invest in Univision to the extent of a company such as Nexstar.
Political/advocacy revenue totaled just $10.5 million in Q3.
Meanwhile, incremental Copa America Centenario advertising revenue was $300,000; the soccer event was promoted heavily during Upfront season by Univision.
By comparison, Q3 2015 saw incremental Gold Cup advertising revenue of $22.1 million.
The company said the shift in ad dollars from different quarters is typical for soccer-related events, thus impacting Q3.
After adjusting for comparability, advertising revenue was $467 million for the three months ended Sept. 30, down 4.3% year-over-year.
How did the radio segment do?
Total revenue for Univision Radio decreased 3.8%, to $71.3 million. Adjusting for comps, segment revenue fell 4.9%, to $68.1 million.
It was worse with the Media Networks arm, which includes the Univision and UniMás broadcast networks and Fusion and Galavisión pay-TV networks.
Total revenue for this division fell 8.8%, to $663.5 million. Adjusted for comparability, Media Networks revenue declined 1.3%, to $630,400.
Asked by analyst if programming changes can occur, in particular in prime-time, Univision Communications President/CEO Randy Falco had a very telling answer to share.
“We have complete flexibility in prime-time,” Falco said on a conference call with analysts held Thursday morning.
He added that more live programming could be seen in prime-time, with less “program licensing agreement” fare from its partnership with Mexico-based minority investor Televisa.
This is a major admission that Univision is having struggles coping with a rapidly evolving Latino television consumer in the U.S., with season-to-date ratings challenges seen in key demos in several dayparts against NBCUniversal’s Telemundo. Rumors have pointed to multiple exchanges between Univision and Televisa on ways to contemporize many of its “Cinderella”-storyline telenovelas seen in prime-time and to provide programming that better appeals to bicultural millennial Hispanics.
Taking just one question during the 28-minute call, Univision also noted that it expects flat to negative low-single-digit growth in Q4, with flat to plus low-single-digit growth seen at it Media Networks and low double-digit pacing for radio — thanks to national dollars, rather than local growth.
Univision leaders also note that the company seeks to increase its non-advertising revenue component over the next few years, and that such efforts will be integral to Univision’s P&L sheet in the months ahead.