Univision to remain in compliance with debt

Might be taken off air by Dish Network in absence of deal

NEW YORK -- Spanish-language media firm Univision Communications expects to remain in compliance with its debt covenants throughout 2009 despite weaker financial momentum amid the recession, CFO Andrew Hobson said in a conference call Monday.

Management also said it is preparing to potentially be taken off the air by satellite TV giant Dish Network as the two sides have not been able to reach a new carriage agreement. Sources said the coming days will be key in the talks.

Meanwhile, Univision's advertising momentum continues to be hit by the recession, even though it is holding up better than others. The first quarter "has been tough, and we expect the year to be tough," Hobson said on the conference call after the privately-held company reported fourth-quarter results.

Univision posted a quarterly loss of $1.99 billion due partly to $2.25 billion in writedowns and charges. Its year-ago loss amounted to $201.5 million. Quarterly revenue fell 7.8% to $502.1 million.

The quarter's charges included charges for its legal tussle and settlement with Televisa of $598.7 million.

For the full year, Univision recorded $5.4 billion in impairment charges and $610.8 million in Televisa charges. "Our fourth-quarter results reflect an operating environment that was among the most difficult we have seen across most industries," Univision CEO Joe Uva said in a statement. But he added: "We are well-positioned to rebound quickly when the climate improves."

Management touted Monday that Univision was the only major broadcast network in the fourth quarter to grow its audience in primetime among adults 18-49. It also highlighted that its LA TV station KMEX-TV beat all other stations in the country for the year to become 2008's No. 1 station among adults 18-49 for primetime and total day.

Univision has struck retransmission consent deals with most major cable, satellite TV and telco distributors. Its latest is an agreement in principle with Time Warner Cable. Management said Monday that final deal terms are still being hammered out as the previous deal is set to expire Tuesday. But the Dish impasse could see Univision's three networks and 64 stations get yanked off the air later this week. A Dish spokeswoman declined comment.

Univision management said in its call that it has in recent days run commercials warning that viewers on Dish Network may lose Univision stations and networks after the latest sweeps period ends Wednesday.
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