Own U.S. net an option for Televisa
Mexican broadcaster Grupo Televisa may consider creating its own U.S. Spanish-language broadcast net if its bid for Univision doesn’t pan out.
It’s said to have approached NBC’s Telemundo, Ion Media Networks (formerly Paxson Communications) and McGraw Hill about an alliance in a move that’s likely to send ripples through the Spanish broadcast biz Stateside.
Bids for Univision, which put itself up for sale this year, are due later this month. At least two powerful groups of private equity firms, with Televisa backing one, are expected to make offers. The Los Angeles-based media conglom, which includes broadcast and cable nets, TV and radio stations, a music company and an Internet group, is expected to fetch north of $12 billion.
But Televisa has been mulling a possible plan B — its own network — in case the price for Univision goes too high, according to a report on Friday.
Televisa is also reportedly discussing a possible radio partnership with giant Spanish Broadcasting System.
It’s not clear if the approaches are partly bluff, intended to scare off rival bidders. After all, Univision gets most of its core programming from Televisa. However, the flow of content is assured under a long-term contract through 2017.
Televisa is seeking to end that contract in a suit before a Los Angeles District Court. If successful, it could begin to shop its content to Telemundo or any other buyer.
After that, Univision would be vulnerable. And until then, Televisa would have to find content for a new network from other providers.
NBC’s Telemundo, while far behind juggernaut Univision, has been aggressively churning out telenovelas and other programming from new studios in Miami.
Televisa and Univision are at odds over the Mexican company’s broadcasting its content over the Internet. Televisa insists it has Web rights to the programming starting in December.
Televisa said in a statement it “sees the U.S. Hispanic market as a very attractive growth market” and is “exploring a number of opportunities to maximize its potential in this market.”
Televisa is a major Univision shareholder, with 11.4%. Selling that stake would unlock a noncompete clause with Univision as well as provide additional funds for a network venture.
Televisa would ideally like to buy Univision outright, but foreign ownership regulations prohibit it form owning more than 25% of a U.S. broadcast net. Partners in its bidding group include Bill Gates’ Cascade Investment, Bain Capital, Blackstone Group, Carlyle Group and Kohlberg Kravis Roberts.
The other consortium is made up of Haim Saban, Providence Equity, Thomas H. Lee Partners, Texas Pacific Group and Madison Dearborn Partners.
Participants have been in and out, and the lineup of firms could still change. Other bidders may also appear. CBS Corp., News Corp. and Time Warner execs have said they don’t plan to make a run for Univision — although some Wall Streeters have said they wouldn’t be surprised to see one or more of them as part of a larger buyout group. Disney has been focused on content following its $7.4 billion acquisition of Pixar earlier this year.