The media economy received a buzz this week with the announcement that Mexican media conglomerate Televisa is investing $1.2 billion for a 5% ownership stake in Univision, and at the same time extending the critical exclusive programming contract through 2020. And these are the same two companies that have spent millions battling each other in court the past few years?
Clearly, this is a smart strategic move for both companies. Univision gets an influx of cash, and perhaps more importantly they can continue to count on high-quality novellas from Televisa for their prime-time schedule. Televisa CEO Emilio Azcarrage Jean has made a lot of noise about starting a Televisa channel in the US; this deal effectively mitigates that possibility.
But Televisa wins as well. They will continue to have a key showcase for their programming in the US through the powerhouse Univision broadcast network. Televisa will also receive higher royalty payments for this new deal, which also resolves the question of digital (Internet) rights to broadcast the programs.
This deal also widens the gap among competitors in the Spanish language space in the U. S., especially for second place Telemundo and the struggling Azteca America. We can expect Univision to continue to play the dominant role in the SL market going forward.
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