Wade Davis Touts Acquiring Univision Stake as "Huge Market Opportunity"

Wade Davis
Dario Acosta/Courtesy of Viacom

Wade Davis

The former Viacom CFO talks to The Hollywood Reporter about his plans for running the Spanish-language media giant after taking a 64 percent majority stake alongside private-equity firm Searchlight Capital Partners.

As former Viacom CFO Wade Davis, the founder of ForgeLight, gets set to become CEO of Univision Communications later this year, he talked to The Hollywood Reporter about his plans to capitalize on the fast-growing Latino demo in the news, sports, entertainment and music spaces.  

"When you look at what the current management team has been able to accomplish in the last 18 months, it's quite remarkable," the exec said as he then looked beyond when the transaction is completed later this year to his strategic vision for the Miami-based Spanish-language media outlet. The Davis-led investor group on Tuesday said it agreed to acquire a 64 percent majority stake in Univision for an undisclosed sum.

Vince Sadusky has been running Univision as CEO since Randy Falco retired at the end of 2018.

Davis on Tuesday discussed driving towards the streaming space with Univision, closing distribution deals and content spending. 

Are you disclosing what your consortium paid for the majority stake in Univision?

It's not something we're going to disclose. It's not because we're trying to be evasive about it. It's important to keep in mind this wasn't the sale of the company in which you would disclose the terms of a transaction for the totality of the company. This was actually a purchase and a sale of specific shares that specific shareholders have. And in that private transaction, the details of the individual transactions are private.

Can you discuss your strategy focus for Univision, and specifically bringing the traditional broadcaster into the streaming-first space?

There's going to be a number of months until we actually close the transaction and the specifics about what the strategy on a go-forward basis is. That's something that got to be built by the team and something that got to be owned by the team. And to the extent we can talk about the strategy publicly, that something that's going to happen in due time. But when I do look at the opportunities that lie in front of the company today, it's absolutely the case when you look at the asset base that Univision has — whether you start with the brand, the power of the brand and connection with this audience — it has this huge audience and the fastest-growing demographic in the U.S. And it's culturally relevant, and Univision is the leader with that audience.

Can you drill down and tell us what you see standing out in Univision's asset base?

They're the number one news platform, the number one sports platform, the number one music platform across TV, radio and live events, and they have a really powerful and differentiated content supply arrangement with Televisa, the largest Spanish-language content producer in the world. And it's for sure the case that if you look at the competitive landscape, there is no high-quality differentiated OTT offering at scale. And if you go back to the asset base that I just described, it's an incredible setup to be able to take advantage of what is a very wide open competitive landscape and a huge market opportunity.

What is Univision doing well now and what needs improvement?

When you look at what the current management team has been able to accomplish in the last 18 months, it's quite remarkable. They've refocused the business on the core audience. They've divested the English-language cable channels as they've been sunset. They've reinvested in their news platform, they've acquired a substantial portfolio of soccer rights, which is actually the largest portfolio of soccer rights in the U.S. and in any language. And they've done an incredible job of refreshing their entertainment slate, with Televisa and selection productions on their own. So the management team has done a remarkable job of stabilizing the business and positioning it for growth.

Are there any content distribution deals up for renewal on the immediate horizon?

They've renewed one hundred percent of their distributor agreements, which is something that no other company in the industry can say. They have no renewals for multiple years going forward. That creates an incredibly stable base from which to build and innovate on. So the management team has taken Univision to a place of strength, and it's a unique platform that we continue to build on, and look for innovation and additional growth.

Does Univision have the scale it needs in today's competitive landscape, or do you envision additional M&A to get additional scale?

There's no question that Univision has the scale it needs to have. It's reflected in the success they've had in renewing with all of their distributors. They're the market leader for this audience. They lead not only in general, but in the categories I referenced: news, sports, music and entertainment. A lot of times when people talk about in the media industry whether they have enough scale, it's really around their ability to drive enough content spend. And that's back to what's so unique about this business. It has this content supply agreement from Televisa, a strategic partner, and Televisa is the largest producer of Spanish-language content in the world. So you take the Televisa strategic partnership, what the business is doing on their own in news, sports and tentpoles like the Latin Grammys, and starting to produce some of their own original content, and there's no question that this business has the scale that's necessary to continue to win.

Any plans for Univision to revisit a potential IPO down the road?

Hopefully it comes across how I'm excited I am about the business in the short term, and I'm going to be single-minded on working with the team to take advantage of these opportunities. An IPO isn't something we plan for; it's not something the company particularly needs. The financial performance of the business has never been stronger in years. They've done a great job of de-levering the balance sheet. It's one of the most profitable media businesses in the industry. It has some of the best margins of the traditional media businesses. So from a financial point of view, an IPO isn't something the company needs or it's not something we're planning for.