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What: Univision Communications will lay off at least 250 employees. The cuts are mostly related to Univision’s digital units including Fusion Media Group.
Why it matters:The lay offs amount to almost 6% of Univision’s workforce.

u4xpomt6_400x400Univision Holdings Inc., the largest Spanish-language broadcaster in the U.S., will undergo a restructuring that could mean the firing of at least 250 employees, accounting for nearly 6% of its workforce.

The layoffs will include cuts at Fusion Media Group, which targets millennial audiences in English and Spanish on cable TV and online. Univision employed about 4,000 people as of March 31, according to filings.

The cuts are part of “a broader streamlining of operations across Univision,” according to Isaac Lee, Univision’s chief news, entertainment and digital officer.

“Constantly adjusting our scale and our processes is a reality of the business we are all in,” he said. “These necessary changes come as we look to strategically bring together several distinct digital media companies into one powerful and nimble digital publishing entity.”

The company is preparing for a possible IPO while struggling with shrinking sales and profit and adjusting to a restructuring that includes adding fusion.net and TheRoot.com to the Gizmodo Media Group, which Univision bought in September.

The changes also follow a year of declining ratings at Univision, and a Q3 report that showed drops in ad sales and a US$199.5 million write-down primarily to account for the diminishing value of the company’s radio properties.

Univision wound up with a US$30.5 million loss in Q3, down from a US$109.8 million profit last year, with US$734.8 million in revenues, down 8.3%.

Univision, based in New York, confirmed that it “eliminated a number of positions in various areas of the company” and said it will be adding new ones in coming months “to support strategic growth areas,” according to an e-mailed statement.

Univision is privately held. Its chairman is billionaire investor Haim Saban.

 

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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