Univision Communications is considering selling off its Fusion Media Group, which includes websites Gizmodo, Deadspin, Lifehacker and The Root and a stake in The Onion’s parent company. The potential move comes as the financially struggling Spanish-language media company pursues a major restructuring following a dramatic leadership change in June.
The move would be a reversal for Univision, according to a Wall Street Journal story: Over the past several years, it has invested in digital assets and sought to diversify its audience by buying English-language websites that appeal to younger, bilingual Hispanic-Americans. The New York Post adds that the unit “was supposed to be Univision’s growth engine.”
The decision to sell Fusion Media Group comes after a business review by Boston Consulting Group this year recommended cuts in the range of $200 million across Univision, The Journal reports. “The cost-cutting has already begun at Fusion Media Group, which recently underwent a round of employee buyouts.” The Boston Consulting Group review recommended combining Univision’s digital assets with those of Fusion Media Group, which have been operating separately from its corporate parent.
Earlier this year, as Inside Radio reported, Univision backed away from a plan to go public after disappointing financial results. In June, the company’s board tapped Vincent Sadusky, former chief executive of TV station-owner Media General, as its new chief executive, replacing Randy Falco.
Last year, Univision sought to sell a 20% stake in Fusion Media Group for $200 million, valuing it at $1 billion, The Wall Street Journal said: “The effort failed to attract buyers, in part because potential investors were skittish about the crowded ownership team running Univision, the parent of Fusion.”
WSJ adds that Univision, like other big media companies, has struggled to adapt to a changing media landscape as cable TV cord-cutting has accelerated, putting pressure on subscription and advertising revenues for cable channels and broadcasters alike. Meanwhile, “the business climate in digital media has been punishing, as tech giants Google and Facebook vacuum up ad dollars and leave other publishers fighting for what’s left.”
Keeping Fusion Media Group separate from Univision would simplify any potential sale of the company’s English-language digital assets, WSJ notes. Prospective buyers could cut a deal for the company’s English-language assets cleanly without acquiring any other assets in Univision’s portfolio.
Meanwhile, a leading Univision lender is forecasting a 4% revenue drop in 2019 for the company, putting more pressure on the heavily indebted media company, The New York Post reports in a story titled “Univision could see its largest decline in revenue ever.”
“This is a poster child of a club deal gone wrong,” a source who was close to Univision’s owners told The Post. The lender believes the network is worth $11.5 billion, not much more than its $8 billion in debt.