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Univision Communications on Friday said it swung to a first-quarter loss, partly due to termination fees paid to its current private equity owners and Mexican partner Grupo Televisa. But the company posted a 9.1 percent increase in a profitability metric that excludes various items.
The Spanish-language media giant, which has been eyeing an IPO, posted a loss of of $137.1 million for the latest quarter, compared with a year-ago profit of $6.2 million.
Univision’s direct operating expenses were lower in the latest quarter, but restructuring, severance and related charges hit $6.2 million in the first quarter, compared with $3.3 million in the year-ago period. A $300,000 impairment loss, “primarily related to the writedown of program rights,” a higher loss on extinguishment of debt and $180 million in fees for the “termination of management and technical assistance agreements” were also drags on the bottom line.
In an apparent preparation for the company’s planned IPO, the agreements set to terminate are with current private equity owners Madison Dearborn Partners, Providence Equity Partners, Saban Capital Group, TPG Capital, Thomas H. Lee Partners, as well as Mexican broadcaster Grupo Televisa. The company said it accrued reduced termination fee payments of $112.4 million and $67.6 million to the private equity sponsors and Televisa, respectively, in the first quarter and made them in April. It said it would continue to pay them quarterly fees under their agreements until no later than Dec. 31.
On an operating basis, Univision’s first-quarter earnings reached $27.1 million, compared with $195.3 million. Adjusted operating income before depreciation and amortization (OIBDA), another profitability metric, rose 9.1 percent to $274.2 million. Quarterly revenue increased 0.6 percent to $624.7 million. First-quarter revenue rose 1.6 percent at the company’s media networks, but radio revenue dropped 7.4 percent.
The company operates such assets as broadcast networks Univision Network and UniMas, formerly Telefutura, as well as cable channel Galavision and sports network Univision Deportes.
Said Falco: “We continued to make significant progress during the first quarter to extend our brand and content across platforms, leveraging our position as the leader in Hispanic media. We signed several distribution deals during the quarter – including
agreements with SlingTV, the National Basketball Association, Hulu and Suddenlink – all of which we expect will broaden our reach and build upon our multi-platform strategy. We’re extremely pleased with these achievements and our current ratings performance and operating momentum, which we believe position us well for the year ahead and for the upfront season.”
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