Univision CEO closes Televisa deal, promises new streaming push
Every morning, from 7 a.m. to 8 a.m., the chief executive of Univision Communications Inc. practices his Spanish.
“I am not fluent, but I’m still at it,” Wade Davis said in an interview last week. “Poco a poco.”
Davis may not speak the language as well as Univision’s viewers. But as former chief financial officer of Viacom Inc., he understands an income statement. And he said his newly bulked-up media company can do something others haven’t: quickly turn a profit in streaming.
Davis plans to achieve that through an acquisition that closed Monday: Univision’s $4.8-billion purchase of the content and media assets of Grupo Televisa, Mexico’s top broadcaster and Univision’s longtime supplier of telenovelas.
The closing marks the official start of a new Spanish-language media colossus and sets the stage for the combined company to unveil a new streaming service.
The longtime partners, based in Miami and Mexico City, plan to finally tie the knot. Google and SoftBank Latin America Fund will become investors.
Univision is the largest Spanish-language media company in the U.S., but hasn’t found its footing in online video yet. It has a free service called PrendeTV and a paid service called Univision Now, but neither has captured a large global audience.
Davis said the new streaming service will have a free and paid tier, with entertainment, sports and news. Behind the paywall will be first-run movies and “an enormous volume of soccer,” he said. Univision will announce a new brand name for the streaming service and details about programming in mid-February.
Univision already faces stiff competition for streaming viewers. U.S. media and tech giants such as Netflix Inc., Walt Disney Co. and Amazon.com Inc. are making more content for Spanish-speaking audiences.
Univision’s rival, Telemundo, plans to start a hub later this year within Peacock, the streaming service operated by its corporate sibling NBCUniversal, and will have the Spanish-language World Cup broadcast. Both are owned by Comcast Corp.
Meanwhile, investors have become wary about the future of streaming after Netflix Inc. said this month that its subscriber growth was slowing.
But Davis said Univision, which is closely held, has two advantages. With Televisa’s assets, Univision owns a large library of Spanish-language programming and more of its own outlets to promote its streaming service.
Univision operates its namesake broadcast network in the U.S., plus the UniMás channel, nine Spanish-language cable networks, 59 TV stations and 57 radio stations that can also be used to promote the new service. It’s now adding four free-to-air channels from Televisa and 27 pay-TV networks.
The combined company will be called TelevisaUnivision Inc.
“When you think about the two biggest line items in any streaming service — it is marketing and content,” Davis said. “The resources of the combined company allow us to do some pretty extraordinary things to improve the overall profitability of our business.”
Although Disney aims to break even on its Disney+ streaming service in 2024, or about five years after its launch, Univision’s service “will be profitable in a small fraction of the time frame,” he said.
Davis was part of a group of private-equity investors who agreed in February 2020 to buy a majority stake in Univision. Since closing that deal, Davis has hired more than 500 people and made changes to the board and management team.
In 2020, Univision named several prominent Hispanic business leaders to its board, including Marcelo Claure, who left SoftBank Group last week; former United Airlines Executive Chairman Oscar Munoz; and former Walmart executive Gisel Ruiz. Last year, Univision hired several new executives, including former Netflix executive Rodrigo Mazon, who is now general manager of Univision’s streaming service and reports to the company’s new president, Pierluigi Gazzolo, who came from ViacomCBS Inc.
In recent months, Univision has been bolstering its programming and distribution business. In October, the company signed a first-look deal with Eugenio Derbez, a popular comedian and filmmaker in Mexico. In September, Univision’s channels arrived on YouTube TV, a streaming service with about 4 million subscribers.
In the third quarter of 2021, Univision’s revenue increased 20% to $754.7 million from a year earlier, spurred by a 33% boost in advertising sales.
Univision’s lead over Telemundo in TV viewership has expanded after the two Spanish-language programmers were nearly tied in 2019. Last year, Univision and its affiliates averaged about 1.2 million total viewers per night in prime time, compared with 924,000 for Telemundo, according to Nielsen. Davis attributed the widened lead to Univision becoming more focused in the types of shows it makes and a re-engineering of the production process.
“Univision had kind of lost its way in terms of what it was delivering to the marketplace,” he said.
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