Univision Under Siege

September 9th, 2016 9:15 AM

When covering the biases inherent to Univision's television news coverage, it is very important to look beyond the stories themselves.  A recent report from The Wall Street Journal reminds us of the critical need to take the occasional dive into the underlying business environment at Univision, and to note the points at which it intersects with its news coverage.

Over the course of this year we've taken notice of Univision's aggressive digital expansion, a run towards English-dominant millenials and away from its core product of Spanish-language news and entertainment. Demography is destiny, after all, and the data shows that the growth of the U.S. Hispanic population is no longer primarily driven by immigration. The creation of Fusion was supposed to fill the product gap which exists between immigrant parents and their acculturated millennial offspring, but failed to do so, which led both to a repurposing and retooling into its current iteration and to Disney's ditching of the joint venture.

Now the other shoe has publicly fallen, and we see the effects of these external pressures on Univision:

A seismic shift in young Hispanics’ television tastes is testing Univision Communications Inc.’s 24-year marriage to its longtime programming supplier, Mexican TV giant Grupo Televisa SAB, a relationship that helped fuel the rise of Hispanic media in the U.S.

Distressed by a major ratings falloff at Univision’s flagship Spanish-language broadcast network, Univision in recent months has been pressuring Televisa’s content chief José “Pepe” Bastón to infuse its programming—dominated by telenovelas, a genre akin to soap operas—with more American flair to appeal to younger and U.S.-born Hispanics, said people familiar with the matter.

Fed up with Televisa’s lukewarm response, Univision Executive Chairman Haim Saban and other board members have even proposed canceling the Televisa deal or cutting Univision’s payments in half, one of the people said. “It’s gotten really, really messy,” one former Univision executive said.

In short, Univision desperately wants to adapt its TV offerings in order to preserve relevance in the midst of a demographic sea change. However, the network is severely constrained from doing so because of its obligations to Televisa. To make matters worse, Telemundo is now consistently beating Univision in primetime with a more diverse mix of telenovelas than Univision's contractually-obligated Televisa-produced fare. But if the IPO continues to receive the cold shoulder, Univision may have no other choice than to go all-in with Televisa rather than diversify its stagnant entertainment product.

The two companies may yet work things out. Last year, they extended the agreement to 2030 and agreed to seek permission from the Federal Communications Commission for Televisa to own a 49% stake in Univision after the IPO—a move that would bind their fortunes even more tightly together.

Univision's effort in scrambling to digital as TV viewers flee in droves (close to 50% over the course of the last 5 years) is not unlike trying to drain the ocean with a spoon. Anchor Mariana Atencio, who performed double duty on both Univision and Fusion and was widely regarded as a future face of the network, ostensibly saw the writing on the wall and jumped ship to MSNBC. It is yet to be determined whether this is an isolated departure or the first in a trend.

Ultimately, this helps explain Univision's over-the-top advocacy not just for open-borders immigration policy, but for a broad swath of left-liberal policies; further confirming what we saw in Jorge Ramos' Harvard video from last year. The network was in great shape so long as immigration was the main driver of growth among U.S. Hispanics. Now that this is demonstrably not the case, and under increasing pressure from all sides, Univision increasingly acts less like a media conglomerate and more like a left-wing special interest group - not unlike, say, Planned Parenthood - whose survival depends on the continued election of liberal candidates. 

Buyers and viewers beware.

Tell the Truth 2016