Univision Communications is canceling a long-in-the works plan for an initial public offering, and it has replaced CFO Francisco Lopez-Balboa, a former Goldman Sachs banker who was hired three years ago to help the Spanish-language broadcaster with its IPO.
Univision is also promoting Peter Lori to CFO. He had been a deputy under Lopez-Balboa and has served in a variety of roles since joining the company in 2005, including as an interim CFO.
Univision’s off-again, on-again IPO was meant to raise $1 billion while cementing a $20 billion valuation on the company and allowing longtime investors like media mogul Haim Saban an opportunity to cash out with a profit.
Randy Falco, Univision’s CEO, has appeared ready to offer an IPO on a few occasions, but each time he has been greeted with a tepid response from Wall Street, even though the broadcaster is very popular with Spanish speakers living in the U.S.
Univision recently reversed a $31 million loss by reporting a $104 million profit in its most recent quarter, even though ratings have fallen over the years as competition from streamers and longtime rival Telemundo has heated up.
Despite the recent profit, a spokesperson said Univision has asked the U.S. Securities and Exchange Commission to withdraw its S-1 filing as it no longer intends to go public “due to prevailing market conditions.”
As the largest Spanish-language broadcaster in the U.S., Univision has benefited from President Donald Trump’s tough stand on immigration — with an audience eager to hear the latest news in their native language. On the other hand, many investors worry the short-term benefit could be undone if Trump builds a wall on the southern border and restricts the flow of potential new viewers.
Despite the challenges, insiders say the services of Lopez-Balboa were no longer needed as Lori has shown his acumen for financially guiding a private media company.
Insiders told The Hollywood Reporter that while investors are disappointed with Falco’s inability to take Univision public, there are no plans to replace him. One insider says Lopez-Balboa is taking the fall for the failed effort at an IPO.
Falco, though, extended his contract just four months ago to remain CEO until Jan. 31, 2020, with support from Saban.
Univision “has remained the undisputed leader in Spanish-language media and at the same time successfully diversified into English-language media to provide young, diverse Americans with the content they crave in the formats they seek,” Saban said after Falco’s contract extension.
Further drama behind the scenes involves Grupo Televisa, which holds a 10 percent stake in Univision and provides it a bevy of telenovelas — to the tune of $290 million in fees Univision paid to Grupo Televisa in 2017 and $300 million the year prior.
While Telemundo has seen increased viewership of its more modern, less formulaic telenovelas, audiences for Grupo Televisa’s old-fashioned variety have fallen, and insiders say Saban is clamoring for change, potentially putting the two investors at odds with each other.
Univision operates such assets as broadcast networks Univision Network and UniMas, formerly Telefutura, as well as cable channel Galavision and sports network Univision Deportes.
“Given that our path to pursue a public offering has changed, this is an opportunity for Frank to begin the next chapter of his career. We wish him the best in his future endeavors,” Falco said Tuesday of the CFO swap.
Falco praised Lori for “helping us to reduce our debt and improve our capital structure,” and added that he is “confident our finance organization will continue to thrive under his leadership.”