Univision Deal Not Expected to Hit Regulatory Snags
Univision’s acquisition by two investment firms in the wake of Apollo Global Management’s Terrier deal isn’t a sign of investor cash heading into broadcasting, industry analysts told us this week. The purchase of a majority stake in Univision by Searchlight Capital Partners and Forgelight, announced Feb. 25 (see 2002250053), isn’t expected to hit regulatory snags at the FCC or DOJ. The Univision deal “isn’t a bellwether of a flow of private equity into broadcasting,” said Patrick Communications media broker Gregory Guy.
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“We’re confident we will be able to receive all necessary regulatory approvals, and we firmly believe this transaction is in the best interests of all stakeholders,” emailed a Univision spokesperson. “We expect the deal to close later this year.” Univision “owns or operates” 65 TV stations and 58 radio stations. Forgelight and Searchlight, which would own 64 percent of the company after the transaction, didn’t comment Tuesday. The FCC didn’t comment.
The transaction isn’t considered likely to face regulatory complications because the investment firms don’t own other broadcast or media properties that overlap with Univision, said S&P Global's Justin Nielson. Mexico-based Grupo Televisa would retain the same 36 percent stake in the company it held before the deal, so the accord is unlikely to run afoul of foreign ownership rules. In December, the FCC Media Bureau approved a request from Univision to be up to 70 percent foreign-owned (see 1912050038).
The deal is “almost like a buyout,” Nielson said. He doesn’t expect Forgelight and Searchlight to hold on to Univision for an extended period. Nielson compared the deal to switching out chairs on the company’s board.
The takeover isn’t similar to Apollo’s foray into broadcasting because the Cox and Northwest stations involved in that earlier transaction are differently situated, analysts said. Apollo saw those stations as undervalued assets, Nielson said. “This is a unique situation,” said Guy. Univision was struggling, and is also involved in programming, the analysts said. It would be positive for other broadcasters if the deal goes well for Searchlight and Forgelight, because positive returns for those firms could eventually attract more outside money to the industry, Guy said.
The new Univision is expected to concentrate less on broadcasting, Nielson said. The new owners intend to enhance the company’s digital presence and focus on “recent content and programming momentum,” the broadcaster says.