Televisa cashes in chips
Mexican b'caster to sell stake and make U.S. play
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Televisa, which lost out to a private equity consortium in its bid to acquire Univision last week, said Wednesday it would seek to sell its shares in the company rather than work with the new ownership, which includes billionaire Haim Saban.
By selling its shares, Televisa would no longer be bound by a 1996 agreement between the two firms mandating that Televisa and Univision be 50-50 partners in new business ventures in the U.S.
Nullifying that agreement would allow Televisa to go into business with Univision competitors, such as NBC Universal's No. 2 Spanish-language broadcaster Telemundo, or to buy TV stations with another U.S. partner.
"If it is not bound by the participation agreement, Televisa will be able to engage in new business opportunities in the growing U.S. Hispanic marketplace relating to its programming or otherwise without offering Univision participation in such opportunities," Televisa said in a statement.
But exiting the deal would not affect Univision's exclusive right to Televisa's Spanish-language TV content in the U.S., which is covered by a 1992 programming agreement that expires in 2017.
Instead, it would allow Televisa to provide English-language telenovelas to U.S. networks. In May it signed a deal with ABC to co-produce an English-language novela.
The company has also said it would co-produce novelas for the U.S. market with Spain's leading producer of dramatic series, Grupo Arbol.
Sources close to Univision said the possibility of a Televisa selloff was anticipated, and such a sale would not affect the closing of the Univision purchase deal or the 1992 programming agreement, from which the network receives the majority of its primetime novelas on extremely favorable terms. Televisa receives royalties consisting of 9%-12% of the revenue generated by its novelas on Univision.
Televisa declined to comment beyond its prepared statement, but sources close to the company said Televisa wants to pursue online ventures in the U.S. and has long wanted to enter the homevideo market.
Univision and Televisa are embroiled in a dispute over digital rights to shows. Televisa says they expire this year, while Univision claims the rights are unsettled.
Televisa has already rolled online musicstore Tarabu in Mexico, and it could market telenovela-related content in the U.S. independently from Univision, on which the telenovelas will continue to air.
Televisa notified members of the consortium, including Thomas H. Lee Partners, Texas Pacific Group, Madison Dearborn Partners and Saban Capital Group, that it "is prepared to discuss with you a sale of its shares of Univision as soon as possible" based on the $36.25 per share the consortium paid for the company.
At that price, Televisa would net around $1.1 billion, boosting its cash on hand to more than $2.5 billion and forcing the buying consortium to take on additional debt.
(Michael O'Boyle in Mexico City contributed to this report.)
