Mexican pay-TV and broadcasting behemoth,
Grupo Televisa S.A.B.
), is likely to gain significantly from its ownership stake in the
U.S. broadcaster Univision Communications Inc. Privately held
Univision is the largest Spanish-language broadcaster in the
Recently Univision together with ESPN of
The Walt Disney Co.
), received a shot in the arm with its impressive broadcasting
performance of the just concluded 2014 FIFA World Cup Football
Tournament. Univision's viewers increased nearly 60% during the
soccer tournament. Notably, Univision's closest competitor is
the Telmundo TV channel owned by Comcast.
Currently, Televisa effectively holds a 38% (after converting
debt into equity) stake in Univison. This leaves scope for another
2% stake buy over the next three years. The existing U.S.
regulation denies any foreign company to control more than 25%
stake in any U.S. broadcaster. However, the Federal Communications
Commission has the right to allow exemptions in select
At present, the owners of Univision are exploring strategic
options to sell the company and may also consider an initial public
offering (IPO) in the next year. Univision's owners have held talks
Time Warner Inc.
) in this regard. However, nothing concrete has emerged so far.
In 2007, Univision was acquired by a consortium led by
billionaire Haim Saban for a total consideration of $13.7 billion.
Other investors were Madison Dearborn Partners, Providence Equity
Partners, TPG and THL Partners. According to industry rumors,
management is expecting more than $20 billion from the Univision
sale. Consequently, Televisa is positioned to gain significantly
from the sale.
Currently, a considerable share of Televisa's income is
generated from its U.S. operations, which includes the sale of
content, website and cable TV services. Televisa allows Univision
to access its content and then rebroadcast it on TV and the
Internet for a royalty.
The U.S. Hispanic TV market is highly lucrative and is growing
at a remarkable pace. In the second quarter of 2014, Televisa's
royalty from Univision was a record-high $84 million, up 19.1% year
over year. Televisa currently carries a Zacks Rank #3
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