Univision and Grupo Televisa Strengthen Strategic Relationship
July 02 2015 - 5:30AM
Business Wire
Univision Holdings, Inc. (“Univision”) and Grupo Televisa,
S.A.B. (“Televisa”; NYSE: TV; BMV: TLEVISA), today announced that,
together with Univision's major shareholders, they have entered
into a Memorandum of Understanding (“MOU”) and that certain
subsidiaries of Univision and Televisa entered into an amendment to
their existing Program Licensing Agreement (the “PLA
Amendment”).
Under the PLA Amendment, the terms of the existing strategic
relationship between Univision and Televisa have been amended as
follows:
- Term Extension – Univision’s
exclusive U.S. broadcast and digital rights (with limited
exceptions) to Televisa’s programming including premium
Spanish-language telenovelas, sports, sitcoms, reality series, new
programming and feature films, will remain unchanged. Subject to
Univision completing a public offering of its common stock that
results in net proceeds to Univision of a minimum agreed upon
amount and no change of control having occurred, the PLA Amendment
extends the term of the PLA from its current expiration date of at
least 2025 to at least 2030.
- Revised Royalty Computation – In
exchange for Univision agreeing to make certain additional revenue
subject to the royalty, effective January 1, 2015 and through
December 2017, the royalty rate on substantially all of Univision’s
Spanish-language media networks revenue is 11.84 percent, compared
to 11.91 percent under the prior terms. On January 1, 2018, the
royalty rate will increase to 16.13 percent, compared to 16.22
percent under the prior terms. Additionally, Televisa will continue
to receive an incremental 2 percent in royalty payments on such
media networks’ revenues above an increased revenue base of $1.66
billion, compared to the prior revenue base of $1.65 billion. The
royalty rate will again increase to 16.45 percent starting in June
1, 2018 and for the remainder of the term, compared to the prior
rate of 16.54 percent. With this second rate increase, Televisa
will receive an incremental 2 percent in royalty payments above a
reduced revenue base of $1.63 billion.
In addition, under the terms of the MOU, Univision, Televisa and
the major shareholders of Univision have agreed to the
following:
- Equity Capitalization Amendment
– The equity capitalization of Univision will be adjusted to
realign the economic and voting interests of Televisa and
Univision’s other stockholders. As a result, Televisa will hold
common stock with approximately 22% of the voting rights of
Univision’s common stock. The classes of Univision shares of common
stock to be held by Televisa will also provide Televisa the right
to designate a minimum number of directors to Univision’s board of
directors.
- Conversion of Debentures –
Televisa will convert $1.125 billion of Univision debentures into
warrants that are exercisable for new classes of Univision’s common
stock. As a result of the conversion, Univision's annual interest
payment obligations will decrease by approximately $16.9 million.
The conversion of Univision debentures into warrants will have the
effect of reducing Univision’s consolidated debt by $1.125 billion.
Univision has agreed to pay Televisa on the date of conversion,
$135.1 million as consideration for the conversion using a
combination of existing liquidity and previously restricted cash,
which will become unrestricted as a result of the conversion.
“These amendments to the PLA and the terms of our MOU underscore
the strength of Univision’s relationship with Televisa and the
significant and unique benefits of our mutually beneficial
partnership,” said Randy Falco, President and Chief Executive
Officer of Univision. “By taking these steps and our pursuit of
other related initiatives, Univision is in a stronger competitive
position going forward. Televisa is the best Spanish-language
content producer in the world, and we are pleased to continue to
have its support as we enter the next exciting chapter of
Univision’s history.”
“We are excited to enter into a new phase in the relationship
with Univision, the leading media company serving Hispanic America.
Univision today is one of the most successful and diversified media
organizations globally thanks to the hard work and dedication of
Randy Falco and his team,” said Alfonso de Angoitia, Executive Vice
President of Grupo Televisa. “With these transactions we strengthen
our relationship further and reiterate our full commitment to
Univision and its future. On a personal note I want to thank Haim
Saban for his leadership of the Company and personal dedication in
bringing these transactions to fruition.”
About Univision Holdings, Inc.
Univision Holdings, Inc. (the “Company”) is a media company
serving Hispanic America. The Company operates two broadcast
television networks: Univision Network and UniMás. In addition to
the broadcast networks, the Company has nine cable networks
including Galavisión and Univision Deportes. The Company’s other
seven cable television offerings are De Película, De Película
Clásico, Bandamax, Ritmoson, Telehit, Univision tlnovelas, and
ForoTV. The Company owns and operates 60 television stations in the
U.S. and Puerto Rico. The Company also owns and operates 62 radio
stations in the U.S. and owns and operates five radio stations in
Puerto Rico. The Company also offers Uforia, a digital music
platform. The Company’s digital properties include Univision.com,
UVideos, Flama, online and mobile websites associated with the
Company’s local television and radio stations, and Univision
Partner Group. The Company has made strategic investments with
filmmaker Robert Rodriguez in El Rey and with Walt Disney Company’s
ABC News in Fusion.
This press release contains forward-looking statements.
Forward-looking statements can be identified by words such as
“anticipates,” “intends,” “plans,” “seeks,” “believes,”
“estimates,” “expects” and other references to future periods.
Forward-looking statements are based on our current expectations
and assumptions regarding our business, the economy and other
future conditions. Because forward-looking statements relate to the
future, by their nature, they are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict. As a result, our actual results may differ
materially from those contemplated by the forward-looking
statements. Important factors that could cause actual results to
differ materially from those in the forward-looking statements
include: cancellation, reductions or postponements of advertising
or other changes in advertising practices among our advertisers;
any impact of adverse economic conditions on our business and
financial condition, including reduced advertising revenue; changes
in the size of the U.S. Hispanic population, including the impact
of federal and state immigration legislation and policies on both
the U.S. Hispanic population and persons emigrating from Latin
America; lack of audience acceptance of our content; varying
popularity for programming, which we cannot predict at the time we
may incur related costs; the failure to renew existing agreements
or reach new agreements with multichannel video programming
distributors (“MVPDs”) on acceptable subscription or
“retransmission consent” terms; consolidation in the cable or
satellite MVPD industry; the impact of increased competition from
new technologies; competitive pressures from other broadcasters and
other entertainment and news media; damage to our brands or
reputation; fluctuations in our quarterly results, making it
difficult to rely on period-to-period comparisons; failure to
retain the rights to sports programming to attract advertising
revenue; the loss of our ability to rely on Televisa for a
significant amount of our network programming; an increase in
royalty payments pursuant to our programming license agreement with
Televisa; the failure of our new or existing businesses to produce
projected revenues or cash flows; failure to monetize our content
on our digital platforms; failure to monetize our spectrum assets;
the failure or destruction of satellites or transmitter facilities
that we depend upon to distribute our programming; disruption of
our business due to network and information systems-related events,
such as computer hackings, viruses, or other destructive or
disruptive software or activities; inability to realize the full
value of our intangible assets; failure to utilize our net
operating loss carryforwards; the loss of key executives; possible
strikes or other union job actions; piracy of our programming and
other content; environmental, health and safety laws and
regulations; FCC media ownership rules; compliance with, and/or
changes in, the rules and regulations of the FCC; new laws or
regulations concerning retransmission consent or “must carry”
rights; increased enforcement or enhancement of FCC indecency and
other programming content rules; the impact of new legislation on
the reallocation of broadcast spectrum which may result in
additional costs and affect our ability to provide competitive
services; net losses in the future and for an extended period of
time; our substantial indebtedness; our failure to service our debt
or inability to comply with the agreements contained in our senior
secured credit facilities and our indentures, including any
financial covenants and ratios; our dependency on lenders to
execute our business strategy and our inability to secure financing
on suitable terms or at all; volatility and weakness in the capital
markets and risks related to our ownership, among other
factors.
About Grupo Televisa
Televisa is the largest media company in the Spanish-speaking
world based on its market capitalization and a major participant in
the international entertainment business. It operates four
broadcast channels in Mexico City, produces and distributes 25
pay-TV brands for distribution in Mexico and the rest of the world,
and exports its programs and formats to the U.S. through Univision
Communications Inc. (“Univision”) and to other television networks
in over 50 countries. Televisa is also an active participant in
Mexico’s telecommunications industry. It has a majority interest in
Sky, a leading direct-to-home satellite television system operating
in Mexico, the Dominican Republic and Central America. Televisa
also participates in Mexico´s telecommunications industry in many
regions of the country where it offers video, voice, and broadband
services. Televisa also has interests in magazine publishing and
distribution, radio production and broadcasting, professional
sports and live entertainment, feature-film production and
distribution, the operation of a horizontal Internet portal, and
gaming. In the United States, Televisa has equity and debentures
that, upon conversion and subject to any necessary approval from
the Federal Communications Commission (“FCC”) in the United States,
will represent approximately 38% on a fully diluted, as-converted
basis of the equity capital in Univision Holdings, Inc. (f/k/a
Broadcasting Media Partners, Inc.), the controlling company of
Univision, the leading media company serving the United States
Hispanic market.
This press release contains forward-looking statements based on
the current expectations of Grupo Televisa, S.A.B. Actual future
events or results could differ materially from these statements.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. Grupo Televisa, S.A.B. undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
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version on businesswire.com: http://www.businesswire.com/news/home/20150702005278/en/
For Univision Holdings, Inc.Investor RelationsAdam Shippee,
646-560-4992ashippee@univision.netorMedia RelationsMónica Talán,
212-455-5331orSard Verbinnen & CoStephanie Pillersdorf / Brooke
Gordon, 212-687-8080orFor Grupo TelevisaInvestor RelationsCarlos
Madrazo, (52 55) 5261 2445cmadrazov@televisa.com.mxorEduardo
Nestel, (52 55) 5261 2438enestel@televisa.com.mxorMedia
RelationsAlejandro Olmos, (52 55) 4438
1205aolmosc@televisa.com.mxorRegina Moctezuma, (52 55) 5224
5456rmoctezumag@televisa.com.mx
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