UNIVISION – THE CALM AFTER OR BEFORE THE STORM

The end of the long-standing feud between Univision and Televisa over the Programming License Agreement has ended and Univision has since solidified its programming pipeline, experienced significant senior management changes and now seems to be in a calm period after the storm, but clearly Univision’s focus appears to be on maximizing value through an IPO.

The extension of the Televisa Programming License Agreement (PLA) until 2025 assures Univision an enviable, efficient and effective content pipeline with a proven success record.

Since that time, a number of management changes ranging from the departure of network President & COO Ray Rodriguez, the announced departure of Univision’s CEO Joe Uva, as well as the replacement of its network news head by a long time Televisa executive, are seen by some analysts as a result of what may be a greater influence by Televisa.

At the same time, it is clear that Haim Saban the point man for the five equity fund consortium which own Univision has recruited an executive marquis name in former NBC President Randy Falco in likely preparation for an IPO n 2012.

So many analysts believe that the calm after the storm is really a calm before the next storm.

Clearly, Univision has a lot of value to regain when considering the $12.3 billion price tag paid to former owner Jerry Perenchio, to Televisa and to the Cisneros Group. The 2010 Census figures and the resulting surge in advertiser interest in both Spanish dominant US Hispanics, as well as the YLA (Young Latino in America) demographic, the continuing uptick in new and mobile media adoption rates by US Hispanics and the cornerstone that the radio sector provides to reach Hispanic listeners creates a very positive environment for Univision’s efforts.

This is the overriding thrust of what is driving Univision’s owners today and surely led by Haim Saban they will put into place the strategies, policies and people they need to in an effort to maximize value, specifically for an IPO.

However, although Univision’s strength as a content provider is largely based and dependent on the Televisa programming relationship, the market has and will continue to change.

Recent content produced outside the Televisa PLA, such as the highly successful “Eva Luna” soap opera by Univision and the also successful “La Reina del Sur” by Telemundo show that Televisa while incredibly strong, no longer has an absolute coke hold on the US Spanish language content market.

Moreover, the formidable corporate structure which combines proven content production and pervasive distribution under at Comcast NBCUniversal and Telemundo / mun2, clearly make the factor of execution as important as any, for both Univision and Telemundo.

By Julio Rumbaut, President, RUMBAUT & COMPANY, an internationally recognized media advisory firm.