Details of the transaction were not disclosed. It’s believed that a small amount of money changed hands for Univision to acquire Disney’s 50% stake in the venture. But Disney’s exit frees the Mouse from obligations to fund the channel that has racked up well over $60 million in losses since 2013.
With the restructuring, Univision has created the Fusion Media Group to house Fusion as well as its Univision Digital and Univision Music divisions, its interest in the El Rey Network and its stakes in a motley collection of digital media outlets including the Root, the Onion, A.V. Club, Clickhole, Starwipe and Flama. Univision is focused on assembling a patchwork quilt of content assets that draw younger audiences, to diversify its operations that are rooted in its linear TV channels, Univision and UniMas.
“The face of America is changing and we are focused on serving a new majority whose influence is rapidly growing — affecting everything from politics and the economy to our culture. Through impactful journalism and smart commentary, our portfolio will serve a rising generation with meaningful content that reflects their values and passions. We don’t just understand the audience, we are the audience,” said Isaac Lee, chief news and digital officer for Univision.
Lee and Disney/ABC TV Group president Ben Sherwood were the architects who birthed Fusion as a news-focused network aimed at English-speaking Hispanic millennials. The deal came together in 2012, when Sherwood was president of ABC News. The partnership called for Univision to handle creative and programming operations while Disney led sales and distribution. Fusion launched its digital platform in late 2012 followed by the cable channel in October 2013.
In short order, the TV channel shifted gears away from news into and emphasis on lifestyle and comedy programming. But last September, Fusion announced another pivot to in-depth and investigative reporting, documentaries and political coverage. The TV channel has struggled to draw an audience, which means renewing its initial carriage agreements will be tough at a time when MVPDs are hammering down on fees for smaller niche outlets. The shifts in programming strategy were frustrating to Disney and spurred the discussions that led to the Mouse’s format exit of the venture.
Univision disclosed details of Fusion’s financial performance in January as it filed a registration statement for an IPO that has since been delayed. In 2013, Fusion had losses of $27.4 million which were split by Univison and Disney. In 2014 the total loss climbed to $35 million,on revenue of $28.1 million and operating expenses of $63.4 million. Red ink for startup cable channels is not unusual, but the uncertainty roiling the TV market at present makes the prospect of investing tens of millions of dollars more in the fledgling effort unattractive, even for a media behemoth such as Disney.
Univision has emphasized Fusion’s success on the digital side. The website has logged 10 million uniques a month, up 305% from a year-ago, with a total reach of 27 million users per month. The Fusion brand also looks to get a boost from a deal with HBO for a new series, “Outpost,” about offbeat aspects of culture in Latin America.
“Fully integrating Fusion into our portfolio closely aligns with our desire to engage with our growing audience wherever they are, whenever they want and in their language of preference,” said Univision president-CEO Randy Falco. Fusion Media Group “is extremely well positioned to reach this young, diverse audience at scale and with passion, irreverence and authenticity.”