Univision Communications has been given a favorable ruling from the FCC on a foreign ownership question involving its partner Grupo Televisa. The decision is an important win for Univision that will make it easier for the Spanish-language media giant to pursue its long-delayed initial public offering.
The FCC granted Univision’s request for a waiver of the commission’s foreign ownership rule, which bars non-U.S. individuals and entities from holding more than a 25% interest in a company that owns broadcast TV stations.
The FCC ruling issued Tuesday allows Mexico’s Televisa and its affiliates to own up to 49% of the equity in Univision and up to 40% of the voting shares. Univision said the decision would allow for greater investment in the company by Televisa and through a possible IPO, a move that the commission determined was in the public interest. Televisa already owns 10% of Univision’s equity and 14.4% of voting shares.
“The FCC’s decision will enable Univision to accommodate increased foreign investment that may result from share purchases by the public in an IPO while enabling Televisa (an existing investor in, and business partner of, Univision) to increase its current equity stake in the company,” Univision said.
Univision pressed the issue after it struck a deal with Televisa in 2015 to exchange some of its existing debt for warrants that could be converted into equity valued at 29.2% of the company, a transaction that would likely come as part of an IPO. But Univision needed the ruling from the FCC before those warrants could be converted to equity.
“Univision has submitted information that grant of its Petition has the potential to encourage investment in the company from new sources and to encourage reciprocity in parts of Latin America,” FCC Media Bureau chief William Lake wrote in the ruling. “The Petitioners have also shown how grant of the application will further Univision’s service to the Hispanic community and other minority communities and advance its empowerment initiatives.”
Univision filed its petition for the decision on foreign ownership in late 2015. There had been speculation that if the approval dragged into the onset of the Trump administration, the decision might not have gone Univision’s way, given the past rancor between the company and President-elect Donald Trump.
Univision broke off its business relationship with Trump when the then-presidential candidate made disparaging remarks about Mexican immigrants as he launched his campaign in June 2015. Trump filed a $500 million lawsuit against Univision for dropping the Spanish-language TV rights to the Miss Universe pageant franchise, which Trump at the time jointly owned with NBCUniversal. That suit was settled last February.
Univision chief news anchor Jorge Ramos also had run-ins with the Trump campaign that made headlines. Trump’s team was quick to point out that one of Univision’s owners is billionaire Haim Saban, a prominent supporter of Democrats in general and Trump’s presidential rival, Hillary Clinton, in particular.
The FCC in 2015 issued a similar ruling in a case involving the music streaming service Pandora. The commission is in the process of updating its foreign ownership rules to allow more flexibility in case-by-case situations, but those rules have not yet been formally adopted by the commission, so the Univision-Televisa question underwent a more rigorous review.