MIAMI – Mexico’s Grupo Televisa, S.A.B., the largest media outfit in the Spanish-speaking world, will invest $1.2 billion in Univision Communications Inc., the leading Spanish-language media company in the United States, the firms announced Tuesday.
The agreement modifies and extends the two firms’ programming licensing contract after several years of legal wrangling with Televisa demanding that Univision pay more for content.
Tuesday’s announcement means that Univision will be recapitalized in exchange for Televisa getting a minority share, a deal that marks a new phase of their alliance to exploit the vast audiovisual market of Mexico and the United States.
Televisa will invest $1.2 billion in Univision and will transfer to the network its 50 percent stake in TuTv, in exchange for 5 percent of Univision.
At the same time Televisa will receive convertible debentures for a 30 percent stake in Univision and in addition will have the option of acquiring another 5 percent of the U.S. company, according to a joint statement.
As a result of this investment, Televisa will name three representatives to the Univision Board of Directors, which will be expanded to 20 members.
Both companies said that Televisa’s investment will strengthen Univision and increase its financial flexibility.
With the new Program Licensing Agreement, Univision will widen its exclusive right to transmit Televisa content on television in the United States and will now have the exclusive right to transmit that content over digital platforms.
Univision will be able to use content produced by Televisa on digital platforms, pay TV and open-signal television on its three channels – Univision, TeleFutura and Galavision – as well as on any Spanish-language network and any digital platform existing now or in the future.
The PLA expiration date is being extended from 2017 to 2020, and subject to the fulfillment of certain conditions, it will be further extendible at least until 2025.
“We are extremely pleased to have reached this important agreement, which fully aligns the interests of Univision and Televisa for the long-term as both companies work to further serve the substantial growth opportunities in Spanish-language media in the United States,” Haim Saban, chairman of Univision Communications, said. EFE