Walt Disney Co.'s ABC sells its Fusion stake to Univision, exits joint venture

Walt Disney Co.'s ABC and Univision Communications have ended their nearly 3-year-old Fusion network joint venture aimed at millennial viewers.

Disney on Thursday sold its 50% stake in the venture back to Univision, which plans to reposition several of its assets, including Fusion, as a "multi-platform destination for the new, rising American mainstream," Univision said in a statement.

Terms of the sale were not disclosed.

Univision now takes over ABC’s role in handling distribution and ad sales functions for Fusion and will maintain editorial control. The company said it was establishing a new business group to include several Univision properties, including Univision Music, Fusion, El Rey, The Root, The Onion, A.V. Club and Clickhole.

The ABC-Univision partnership failed to achieve the level of success the companies had hoped for when they launched the outlet in October 2013 in a high-profile bid to reach young bilingual Latino adults desired by Madison Avenue. 

Fusion ended up losing tens of millions of dollars for Univision and ABC. The TV channel is available in just about 40 million homes, making it difficult to attract major advertisers. The channel lacks distribution by two major carriers, Comcast Corp. and Time Warner Cable.

Last summer, Univision acknowledged that Fusion and another start-up TV channel, El Rey, lost $85.2 million in 2014, according to regulatory filings.

Disney executives became frustrated with the partnership when Univision abruptly changed course several months before the channel launched. Univision news executives decided to position Fusion as a network for all ethnicities, rather than focus on Latinos.

But Disney already owns a channel, called Freeform, that is targeted to the same demographic, and the company did not want to own competing properties.

The Fusion cable TV channel and its edgy website also took on a political tone that made some executives inside Disney uncomfortable, according to two people familiar with the matter who asked not to be identified discussing internal matters.

The Fusion website, in contrast, was able to attract a large audience with its cultural coverage, a variety of viewpoints and aggressive reporting, including during the 2014 cyberattack at Sony Pictures Entertainment.  Fusion's website says that it attracts more than 10 million visitors a month. 

Fusion represented Univision's first major push into English-language programming, an acknowledgement that the privately held Spanish-language media company needed to reach beyond its loyal audience of immigrants to stay relevant for younger audiences.

"Through impactful journalism and smart satirical commentary, this first-in-kind multicultural-focused media portfolio will continue serving a rising generation with meaningful content," Isaac Lee, Univision's chief news and digital officer, wrote in an email to Fusion's staff.

Most second- and third-generation Latinos watch TV in English, so Univision began aggressively courting those viewers with Fusion. 

Two-thirds of Latinos ages 16 to 25 in the U.S. were born here, and nearly all are proficient in English, according to a Pew Research Center report in 2013.  Advertisers are keenly interested in reaching this segment, the largest and youngest minority group in the U.S. 

As media have evolved, so has Fusion.

meg.james@latimes.com

Twitter: @MegJamesLAT

Copyright © 2017, Los Angeles Times

UPDATE

6:09 p.m.  This article was updated with subscriber numbers and information about the Fusion website.

This article was first published at 1:51 p.m.

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