Analysis: Univision – A New CEO for it’s IPO?
The announcement this week that Joe Uva is leaving his post as Univision’s CEO at the end of March took even some Univision employees by surprise. Uva, who was hired four years ago from media buying agency OMD to lead the largest U.S. Hispanic media company (2010 revenues $2.25 billion), resigned his post to “be able to seek better opportunities.”
Univision declined to make Mr. Uva available for an interview, and company spokespeople declined to elaborate at all at a marketing breakfast held only one day after the announcement of his departure. And though Uva didn’t cut a figure as large as his predecessor, Univision founder A. Jerry Perenchio, his departure brings an end of an era of sorts for Univision Communications, as he presided over some major milestones during his relatively brief tenure as CEO.
For starters, it was under Uva, now 55, that Univision was able to resolve its long-standing feud with partner and programming supplier Grupo Televisa. The dispute, which brought the partners several times to a federal court in California, was ultimately resolved in late October, when the two parties announced a renewed partnership involving, among other things a commitment of $1.2 billion by Grupo Televisa, which not only helped capitalize a heavily indebted Univision, but gave the Mexican media giant more leverage –and decision-making power- at Univision’s top level.
At the time of the October 5th 2010 announcement, Mr. Uva praised the renewed cooperation with Televisa as an agreement that would “greatly strengthen Univision’s balance sheet.” Yet, he made sure to stress that such cooperation would be done “in parallel with the ongoing activities of Univision Studios.” [Univision Studios were launched at the end of 2009 and pitched as Univision’s new phase as producer of original content, but media observers dismissed this as an strategy to snub Grupo Televisa, since they were still embroiled in a famous legal battle.]
Interestingly, Uva’s message at the time seemed to contradict that of Univision’s main investor, Los Angeles billionaire Haim Saban, who famously told the Wall Street Journal when asked about Televisa’s formula for TV shows: “Why would I even wrack our brains here to go try and duplicate what they’re doing?... “We don’t need to. We have the original Coca-Cola formula. We are the butler of the Coca-Cola formula.”
While these contradictory messages might not be at the heart of the Mr. Uva’s departure, Univision announced that as of March 14th Mr. Saban would be taking additional responsibilities in New York until a replacement is named.
Univision has stated the goal to become the top rated U.S. network overall within 5 years.
A new CEO for the IPO?
Univision was taken private in 2006 by a private equity group in a $12.3 billion transaction. It is now mulling over an IPO as an exit to monetize that investment, several media outlets report, as the IPO market in media and entertainment is showing no signs of cooling. The IPO could happen as soon as next year. The private equity group led by Madison Dearborn, Providence Equity Parrtners, Texas Pacific Group, Thomas H. Lee an Saban Capital, suffered heavy paper losses as markets turned, but has grown more confident of exiting the investment at a profit as Univisions’s revenues have grown and its relationship with Televisa has stabilized, the Financial Times reports.
It makes sense that Univision wants to have a new, maybe investor friendly, CEO for the period coming up before it’s IPO. Who that person is going to be is anyone’s guess. Market chatter this week pointed at the possibility of recently named COO Randy Falco taking over as CEO, and even to Mr. Uva’s potential hiring by NBC. None of those rumors could be confirmed It will also be interesting to see the role that Televisa will play in the election of the new CEO. Televisa recently flexed it muscle when Isaac Lee and Alex Brown were elected new presidents of News and Sports at Univision. Under the recently signed agreement Televisa can obtain up to 30% of Univision’s shares. The Mexican media company could increase its stake to 40% should regulatory restrictions on foreign ownership of U.S. media companies be relaxed.
Asked by Portada whether a replacement for Mr. Uva will be ready by the time of Univision’s May 19th upfront presentation, a spokesperson said: “We have no further comments.”
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