SOLD to the highest bidder. Univision goes for $12+ billion.

Below are some excerpts from The Wall Street Journal's coverage of the sale of Spanish-language media company Univision.

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The Wall Street Journal

June 28, 2006

Investor Group Snags Univision; Televisa Fumes

By MIRIAM JORDAN, DENNIS K. BERMAN and JOHN LYONS

-- Merissa Marr contributed to this article.

June 28, 2006

The chaotic auction of Spanish-language broadcaster Univision Communications Inc. has resulted in an equally tumultuous outcome.

Univision yesterday confirmed its planned sale to a consortium of private-equity investors who will pay $12.3 billion and assume $1.4 billion in debt. But in doing so, Los Angeles-based Univision appears to have further rankled an important business partner it had already been feuding with: Mexico's Grupo Televisa SA, the company that provides much of the popular programming that has made Univision the dominant Spanish-language TV network in the U.S.

Televisa, which already owns 11% of Univision, led a group that made a competing bid for Univision. For weeks, it was expected to win the deal, fulfilling Televisa Chief Executive Emilio Azcarraga Jean's dream of controlling the U.S. media asset. After losing the deal early yesterday, people close to Televisa complained bitterly that Univision and its controlling shareholder -- billionaire A. Jerrold Perenchio -- had ignored its bid, failing to discuss it even though the bid was very close in value to the winning offer.

...

The winning bid came from a private-equity group made up of Texas Pacific Group Inc., Thomas H. Lee Partners, Madison Dearborn Partners LLC, Providence Equity Partners Inc. and media mogul Haim Saban. The private-equity partners are contributing $900 million, with $250 million coming from Mr. Saban, and financing the remainder. The consortium didn't speak publicly about how it plans to operate Univision, which consists not just of the highly rated broadcast network, but also sister network TeleFutura, 73 radio stations and several record labels.

The acquiring group's winning bid of $36.25 per share came after an earlier offer of $35.50 was rejected. Televisa and partners Bain Capital and Cascade Investment late last week offered $35.75, but in a prepared statement Televisa said, "repeated offers to discuss all
aspects of our proposal including price" were disregarded.

...

Both offers were well below the $40 per share Mr. Perenchio initially sought when he put the company on the auction block in February. Nonetheless, the press-shy Mr. Perenchio in a written statement characterized it as a "blockbuster transaction." Mr. Perenchio himself stands to reap $1.4 billion in the transaction, a giant windfall from the $33 million he invested in the company 14 years ago.

This blockbuster immediately faces complex problems, however. Televisa said it has "a number of options it is considering." Those could include taking legal action against Univision, presenting a new bid or somehow moving its programming to new broadcasting venues. People close to the matter said the winning bidders left room in their final documents to bring Televisa into the deal, but Televisa was steadfastly opposed.

"We've made a decision, and we're not going to join the winning bidder. We're not going to bail that consortium out of the deal that it made," the Televisa spokesman said.

Univision and Televisa have a fractious history together. Mr. Azcarraga's grandfather, who got his start buying radio stations, started assembling the network of U.S. TV stations that eventually became Univision in the 1970s after being surprised by the almost total lack of Spanish-language programming in the states at the time. Mr. Azcarraga's father, a flamboyant man who went by the nickname El Tigre, was forced to sell the network in the late 1980s after a fight with U.S. regulators who charged that he was in violation of foreign-ownership limits of media companies.

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Univision Sale in Trouble?

Whether it's by chance or by conspiracy, it appears that the process set by Univision to sell itself and fetch as much as $14 billion is in trouble. If it was going to be hard to get that much money before, I can only image how hard it will be to get it now.

This is a very important story to pay attention to, especially for ethnic marketers, but the Univision sale is also a measure of the value of marketing directly to Spanish-dominant Hispanic Americans and the success of the industry built around it.

News media have circled around this story the last three days:

Today's (Friday) Wal Street Journal has a front page story on this sale. The headlines tell it all: "In Univision Deal, Frayed Coalitions and New Turmoil" then "Questions Emerge Over Value of Media Empire Focused on Latinos in the U.S." and finally "A Swarm of Top Financiers."

And there is this Associated Press story out last night with the headline: "Univision Cool to $10.7B Acquisition Offer." As well as this Reuters story about a potential new bid by Televisa.

And this was preceded by two days of negative media attention:

Thursday's front page of the The New York Times business section had a story by business reporter Andrew Ross Sorkin which screamed: "Disarray In Auction of Univision."

The favorite to buy the company, Mexican media conglomerate Televisa and American investors, missed the "deadline." Sorkin reports: "Though executives involved in the process said changes in the market were a factor, some thought the missed deadline by Televisa was a negotiating tactic." He continued: "Executives within Univision and the rival group have begun to speculate that the deadline was missed ... as part of a strategy to disrupt the auction process in an effort to drive down the price."

But given the right price the consensus is it will sell quickly. Sorkin's story concludes with the following: "The buyer would immediately gain the biggest gateway into a rapidly growing Latino market with some $480 billion in annual buying power."

The bad news continued Thursday with stories in The New York Times, Wall Street Journal and The Washington Post.

"The future of Univision Communications Inc. remained in limbo a day after the call for bids was supposed to close," the Post's Kim Hart and Brooke A. Masters reported. They quote one analyst who says, "There has been an ongoing reallocation of advertising spending from television to the Internet, and Univision is not immune to that threat."

A Televisa spokesperson tells the Post: "We're confident that we'll come forward with the most attractive bid."

Study: More Latinos Get Elected to Office

An Associated Press reporter in Houston, Texas called me today to comment on the growing number of Hispanic election officials across the nation. The piece, excerpted below, is a walk-up to the annual convention of the National Association of Latino Elected and Appoined Officials.

Study: More Latinos Get Elected to Office

By ANABELLE GARAY, The Associated Press

Wednesday, June 21, 2006; 9:01 PM

DALLAS -- Latinos have increased their presence at all levels of government over the last decade, with more than two of every five serving in Texas, a Hispanic political group reported.

At the start of this year, 5,132 Hispanics were in elected office around the country _ a 37 percent increase from 1996, when 3,743 Latinos held elected posts.

The results were part of a study announced Wednesday in Dallas to kick off the annual convention of the National Association of Latino Elected and Appointed Officials.

"It's in everyone's interest, it's in every party's interest, to cultivate the number of Hispanic elected officials," said Adam J. Segal, director of the Hispanic Voter Project at Johns Hopkins University.

Latino elected officials now hold office in 43 states, but a whopping 42 percent of them call Texas home. Most other Latino officials represent areas with large Hispanic populations, such as California, Florida, New Jersey, New York and Illinois, the study said.

Click [here] for the full article.

NPR: Univision Sale Comes Amid Increased Competition

Noah Wolfe turned me onto this story today, thanks!

Media
Univision Sale Comes Amid Increased Competition

by Felix Contreras

Morning Edition, June 20, 2006 · Bids are expected to top $11 billion in the sale of Univision, the dominant Spanish language media outlet in the United States. But the network's next owners will face big challenges. There is more competition than ever from newer Spanish media. To keep its dominance, Univision seeks to attract and keep, younger, bilingual Latinos.

Click [here] to listen to the story.

Debate Emerges Over Ethnic Hairstyles

The Washington Post printed a front-page Metro section story on Saturday, June 17th about a legal fight over employee hairstyles at the Six Flags America amusement park in Largo, Maryland.

Click [here] for the full article which has jumped into the blogs. Technorati has archived dozens linking to the story and providing commentary.

Viva TV Coming Soon

Washington Post writer Arshad Mohammed wrote a piece on Friday about Verizon's plans to offer expanded programming through its Fios digital cable system. Mohammed reports that among the offerings will be "Viva TV, a channel under development that will offer Spanish-language content aimed at the Hispanic community. The article is available [here].

In January recent speech to industry platers, Corporation for Public Broadcasting president and CEO Patricia de Stacy Harrison noted: "Today, over 45 million Americans live in homes that are Spanish-speaking. Just this week, CPB approved working toward a major development grant to support WNET's VIVA-TV, a 24-hour digital multicast channel due to launch in the fall of this year. We are excited about the possibility of bringing the highest quality television and online programming to Hispanic homes.What this can mean is new audiences for public TV." The full text of her speech is [here].

Minnesota Public Radio's The Current has a story on the channel [here].

Televisa Threatens to Create American Network to Compete with Univision

June 8th was the rumored deadline for potential bidders for Univision to submit their proposals. It's unclear, from media reports, if that was a drop-dead deadline and whether Televisa and others submitted their bids.

I am intrigued by news that Mexican media conglomerate Televisa, already a modest stakeholder in Univision, and a potential suitor for the rest of Univision's assets, has leaked word of a "plan B" should their proposal fall through. One potential partner for that effort is SBS, though others are named as well.

I have seen few reports on the Univision sale in the past week and only the financial news services appear to be reporting on this closely.

Click [here] or [here] for the Financial Times story.

Click [here] for the Bloomberg story.

Click [here] for word of another potential SBS media project in Puerto Rico.

Reuters Reports on First Latino Bank in California in 35 Years

One industry that has experienced a rapid growth in marketing aimed at Latinos has been the financial services industry, namely banks. It should be no surprise that Latinos have become an enormous economic force whose strength only continues to grow.

Reuters reported today on the establishment of Promerica, a new bank backed by some well known Hispanic businesspeople, including the Chairman Maria Contreras-Sweet and Henry Cisneros, and non-Hispanic financiers.

Hispanic advertising agencies have aggressively competed for the marketing accounts of major national and international banks servicing the growing Latino population in the United States.

Click [here] or [here] for the full Reuters article.

Washington Post Series on "Being a Black Man"

The Washington Post has undertaken a tremendous feature project that will be reporting on Black men in America. I am already impressed with the depth of this project and the amount of newsprint and staff time the paper has devoted to it.

I look forward to hearing how this series is received within the African American community and discussing it with the clients of my new agency, The 2050 Group, as well as my students at Johns Hopkins University.

The first article in the series, by Michael A. Fletcher, ran on Friday with the following explanation:

"In the coming weeks and months, The Washington Post will explore the lives of black men through their experiences -- how they raise their sons, cope with wrongful imprisonment, navigate the perceived terrain between smart and cool, defy convention against the backdrop of racial expectations. On Sunday, The Post will publish the findings of a major poll conducted jointly with the Henry J. Kaiser Family Foundation and Harvard University. The nationwide survey measured the attitudes of black men on a variety of issues and asked others for their views of black men."

Fletcher framed the Post's contribution to history with a quick summary of research since 1900:

"Over the past 100 years, perhaps no slice of the U.S. population has been more studied, analyzed and dissected than black males. Dozens of governmental boards and commissions have investigated their plight, scholars have researched and written papers on them, and black men have been the subject of at least 400 books.

In the early 20th century, researchers pioneered a still-evolving movement to pinpoint a biological link between black men and crime. After the social turmoil of the 1960s, experts spotlighted the rampant deprivation and lack of opportunity among black men that lent urgency to President Lyndon B. Johnson's War on Poverty.

Later, the focus became the diminishing opportunities in cities, where well-paying manufacturing work was vanishing, locking many unskilled black men out of the job market. That gave way to concerns about drugs and crime and the fraying of the family structure, as 70 percent of black babies were being born to unmarried mothers and incarceration rates soared.

The NAACP Legal Defense and Educational Fund hosted a 1985 panel discussion that called young black men "an endangered species," a label that stuck even as some black men were making strides toward the middle class and a new level of social acceptance.

In 1995, the Million Man March, spearheaded by Nation of Islam leader Louis Farrakhan, drew hundreds of thousands of black men to the Mall in an unrivaled show of unity and concern for one another. The gathering seemed to signal a watershed moment of self-reflection.

Since the march, black men have met in thousands of groups to address their problems, reinforce their progress and understand their lives with greater clarity. Perhaps the latest, most dramatic evidence of this involvement is "The Covenant," a book charting a plan for black self-improvement that was an outgrowth of commentator Tavis Smiley's State of the Black Union forums. The book has been a No. 1 seller on the New York Times nonfiction paperback list."

As it turns out, I am in the middle of reading "The Covenant with Black America" which is a powerful, well-written book edited by Tavis Smiley. Before reading this book I was amazed and excited by the buzz I was hearing in the African American community about this book and then thrilled by its position at the top of paperback charts. Though I have not finished it yet, I alredy plan to recommend it to everyone who seeks to understand or connect with the African American community, it's that important and valuable. I will post on this book soon.

To read Friday's cover story of The Washington Post, "At the Corner of Progress and Peril," click [here].

To read Sunday's cover story of The Washington Post, "Poll Reveals a Contradictory Portrait Shaded With Promise and Doubt," by Steven A. Holmes and Post polling director Richard Morin, click [here].

The Year of the Black Candidate?

Might this be "the year of the Black candidate?"

The Boston Globe reports that the Massachusetts Democratic Party has nominated its first African American candidate for Governor in state history. Former Clinton Administration official Deval Patrick, who I understand served as Asst. Attorney General for Civil Rights, sailed to victory at the Party's nominating convention.

I find this development quite exciting. And, since I cut my political teeth as a youngster growing up in Massachusetts, I am happy to see the Mass. Dems. may draw national attention to the primary. But more than anything else I am thrilled to see such an impressive, qualified candidate who has a strong civil rights background.

The Globe reports that Attorney General Thomas F. Reilly and venture capitalist Chris Gabrieli, a loyal New Democrat came in second and third respectively, earning spots on the statewide Party primary ballot.

"The victory makes Patrick the first African-American to be endorsed by a major political party for governor in Massachusetts history. His 10-minute speech to the delegates, touching on his path as a frightened 14-year-old boy from Chicago's South Side to elite education and success in Massachusets, made some in the crowd weep."

Click [here] for the full article.

See previous post on NYT Magazine feature on Maryland Senate candidate and current Lt. Governor Michael Steele.