Univision Buys Fusion Stake from ABC, But Will it Get It to Work?

What: Univision Communications Inc. (UCI) has reached an agreement with ABC to become the sole owner of Fusion. It will integrate Fusion into a newly formed Fusion Media Group, which will also include The Onion, The Root, Flama, Univision Digital, Univision Music and El Rey
Why it matters: This is a move of Univision to strengthen its offering for Millennials and the American Mainstream as its traditional Spanish-language offerings, while very large, are not growing at a a rapid pace.  Fusion did not fulfill the rating and engagement expectations it had when Univision launched it together with ABC two years ago.  Univision is also trying to make itself attractive as it intends to go public (IPO).

RXX6T990_400x400 U4xpomT6_400x400Univision Communications  announced it will be forming the Fusion Media Group (FMG). FMG intends to serve as the multi-platform destination for the new, rising American mainstream.
In a related step, Univision has reached an agreement with ABC to become the sole owner of Fusion, the joint venture the two companies launched in October 2013.
Effective immediately, UCI will take over ABC’s role in handling distribution and ad sales functions for Fusion's multi-platform network and will have editorial control. The transition of ownership will happen once the transaction is completed, which is expected to be as soon as reasonably practical. Terms of the transaction are not being disclosed.

Unmet Expectations

Fusion, the two and a half-year old network was expected to be ABC News’s answer to a 24-hour cable channel, while giving Univision access to the English-language market. Despite large investments (including the hiring of renowned journalists), Fusion has not been able to gain substantial traction among its target audience. According to Univision, it currently reaches approximately 27 million people each month across all platforms, and in 2015 its website traffic grew over 305% (10 million monthly uniques).
It was widely known among industry insiders that ABC/Disney wanted to get out of Fusion.  One reason for ABC/Disney’s loss of interest in Fusion may be also related to Disney's US$ 400 million investment in Vice Media,  the digital and cable powerhouse that targets a similar demographic to Fusion.

It was widely known among industry insiders that Disney wanted to get out of Fusion.

Other FMG Brands

Univision has grown a collection of brands that include its interests in Fusion and El Rey as well as The Root, The Onion, A.V. Club, Clickhole, Starwipe, Flama, Univision Digital and Univision Music. All these assets are now part of The Fusion Media Group (FMG).  According to Univision, this move further exemplifies the company’s commitment to serve multicultural audiences across platforms and languages. Fusion has a weekly programming block on UniMás, UCI’s second broadcast network, and recently expanded its reach through an agreement with HBO to broadcast a new series, “Outpost”, and a one-hour special helmed by Univision and Fusion News Anchor, Jorge Ramos.

“This is an important time for UCI as we continue to evolve as a company to meet and exceed the demands of the cross-cultural influencers that we serve. Fully integrating Fusion into our portfolio closely aligns with our desire to engage with our growing audience wherever they are, whenever they want and in their language of preference,” said Randy Falco, president and CEO, Univision Communications.

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