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Groupo Televisa to invest $1.2 bil in Univision

Deal will net larger Spanish-speaking U.S. audience

MEXICO CITY — Spanish-language media giant Televisa said Tuesday it had closed a deal that may deliver up to a 35% stake in U.S. web Univision.

Under the deal, Televisa would invest up to $1.2 billion in the company with $130 million in cash for a 5% share with an additional assumption of debt that would equate to 30% of the value of the company.

The deal will extend the content-sharing that has given Univision consistently hit content for years from 2017 to 2020, and, subject to conditions, through 2025, and give Televisa boosted royalties.

According to the Wall Street Journal, the deal will mean an additional $48 million in royalties for Televisa in the first year.

The daily asserted that Univision will be paying $549 million in further royalties by 2018.

The conglom will be able to buy an additional 5% stake in the company in five years; however, U.S. law restricts foreign ownership of U.S. broadcasters to a 25% share of the company.

The deal comes full circle following the founding of Univision in 1961 by a group of investors, including Televisa founder Emilio Azcarraga Milmo. The group was then sold to another collective led by Israeli-American billionaire Haim Saban in 2006.

With a growing market share of primarily Spanish-language consumers, Televisa’s proven, Mexico-tested content gave Univision an undeniable edge in the marketplace — one that the Mexican web said merited additional royalties in a drawn out lawsuit that lasted until January 2009, when the two settled to give Televisa $25 million in unpaid royalties ($21.5 million of which had already been paid under protest) and an additional $65 million a year through 2017 in advertising.

The deal gives Televisa considerably greater access to the burgeoning Spanish-language market in the U.S., and relieves a debt-burdened Univision on the heels of last month’s first-ever win for a Spanish-language web for U.S. primetime ratings in the 18 to 49 demo over English-language.

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