FCC Allows Televisa to Increase Stake in Univision to 40%
What: The Federal Communications Commission (FCC) has decided that it will allow foreign investors to own equity in Univision beyond the mandated 25% cap on foreign ownership in U.S. radio and television companies, Radio and Television Business Report reveals. Foreign investors will now be able to own up to 49% of Univision’s stock and voting rights.
Why it matters: The FCC announcement opens the way for Televisa, a major Mexican media company, to increase its stake in Univision to 40% from its current 22% ownership. Televisa will do so by converting the Univision debt it owns into stock. As a result, Univision's sizable debt load will be reduced and it should be able to put more resources to strengthen its programming, which lately had lost ground against competitor Telemundo.
In July 2016 Univision requested the Federal Communications Commission (FCC) permission to increase Televisa's stake in Univision from 10% to 40%.
The FCC now has granted permission to increase that stake to 40%. (Although it is not clear whether Televisa already holds a 22% stake as a result of a MOU with Univision announced on July 2, 2015. At the time, Televisa said it planned to increase its stake in Univision to 22% and swap US $1.125 billion of Univision debt it held to equity shares.) In any case, with the new FCC ruling Televisa will be able to increase its stake to 40%, exchanging debt for equity, and Univision's US $9.3 billion debt load (31.12.215) will be substantially reduced.
Univision's debt load will be substantially reduced as a result of the FCC allowing Televisa to increase its stake
NHMC Supports Televisa Stake Increase
Several Hispanic organizations including the National Hispanic Media Coalition (NHMC) have written over the past months to the FCC (check filing August 29, 2016) favoring the increase of Televisa's stake in Univision to 40%. Alex Nogales president of NHMC wrote that the "NHMC supports the Petition because of the potential it presents for American Latinos to tell their stories to the nation, in English and in Spanish. Univision has stated that Televisa’s past investments in Univision have resulted in the hiring of more American Latinos,and have resulted in an increase in its U.S.-based content production. NHMC is encouraged that Univision will utilize the capital infusion to further bolster its Spanish-and English-language programming in the United States and further grow its diverse talent pool."