Televisa Takes Univision Stake

NEW YORK/MEXICO CITY: Mexican media giant Grupo Televisa has invested $1.2 billion in Univision Communications for a minority stake, while also expanding its long-term program licensing agreement with the Hispanic broadcaster.

In addition to its $1.2 billion investment, Televisa will contribute its 50-percent interest in TuTV, to gain a 5-percent equity stake in Univision and debentures convertible into an additional 30-percent equity stake in the future. Televisa also secures the option to acquire an additional 5-percent equity stake. With the transaction, three Televisa representatives will join the Univision board, which will increase to 20 members.

Meanwhile, the expanded program licensing agreement grants Univision an enhanced portfolio of exclusive U.S. Spanish-language broadcast rights, Univision will now have exclusive U.S. Spanish-language digital rights to Televisa audiovisual programming. Univision will gain the ability to use Televisa online, network and pay-television programming on Univision, TeleFutura and Galavision, any future Spanish-language networks and on current and future Univision Interactive platforms. The deal is expanded to 2020, from the current 2017 expiration. Upon satisfying certain conditions, the deal is extended to at least 2025. In exchange, Televisa will receive increased royalties from Univision, rising from the existing 9.36 percent of television revenue, excluding certain major soccer events, to 11.91 percent of substantially all of Univision’s audiovisual and interactive revenues through December 2017, at which time royalty payments to Televisa will increase further to 16.22 percent. Additionally, Televisa will receive an incremental 2 percent in royalty payments on any Univision audiovisual revenues above the 2009 revenue base of $1.6 billion.

"We are extremely pleased to have reached this important agreement, which fully aligns the interests of Univision and Televisa for the long-term as both companies work to further serve the substantial growth opportunities in Spanish-language media in the United States," said Haim Saban, chairman of Univision Communications, on behalf of Univision owner Broadcasting Media Partners, which includes Madison Dearborn Partners, Providence Equity Partners, Thomas H. Lee Partners, TPG Capital and Saban Capital Group. "Univision is performing strongly, and this strategic partnership uniquely positions the company for the foreseeable future."

Emilio Azcarraga Jean, chairman, president and CEO of Grupo Televisa, added, "This transaction with Univision provides Televisa with a highly attractive strategic platform for the continued distribution of our content in the U.S. marketplace, our most important media marketplace outside of Mexico, and, in turn, to realize enhanced value for our stakeholders. As the largest media company in the Spanish-speaking world, Televisa has an unrivaled understanding of Spanish-language media markets. We are especially optimistic about the long-term growth potential of the U.S. Hispanic media marketplace, and our economic interest in this premier platform through Univision should further enable us to participate in, and benefit from, this potential."

"The U.S. marketplace is of paramount importance to Televisa’s strategy of expanding our reach beyond Mexico and maintaining our leadership as the leading media company in the Spanish-speaking world," commented Alfonso de Angoitia, executive VP of Grupo Televisa. "Accordingly, we have been working diligently to realize the value of our content in the U.S. We are confident that this investment in Univision achieves our objectives while positively improving our financial results from day one and providing us with the opportunity to benefit in the economic upside of this venture."

"This agreement will greatly expand and deepen the most important alliance in Spanish-language media today, as it underscores that Univision’s broadcast and interactive platforms will remain the U.S. destination for the world’s best Spanish-language programming for the foreseeable future," noted Joe Uva, CEO of Univision Communications. "We look forward to continuing to work closely with our partners at Televisa in parallel with the ongoing activities of Univision Studios to ensure we are providing our audiences with the most successful and relevant content across our television and interactive platforms, and our clients with the most creative and flexible solutions. In addition to providing considerable benefits to our audiences and clients, today’s agreement will greatly strengthen Univision’s balance sheet."