In June 2006 a group of investors, led by media and entertainment billionaire Haim Saban’s Saban Capital Group, agreed to acquire the equity of the US Spanish language television channel Univision Communications, for US$13.7 billion plus debt assumed at the time of US$1.4 billion.
Saban’s partners in the deal included David Bonderman‘s TPG Capital, Providence Equity Partners, Madison Dearborn Partners and Thomas H. Lee Partners – i.e. all amongst the crème de la crème of private equity investing – and the deal closed nine months later, in March, 2007 after receiving the necessary Federal government regulatory approvals. Sabah serves as Chairman of the Board of Director of the company, the operations of which are led by CEO Randy Falco.
The subsequent financial crisis and economic recession that hit, together with the collapse of Lehman Brothers, no doubt significantly adversely affected Univision’s advertising revenues for a while. Nevertheless acquisition of the channel, which is focused on serving a growing and, increasingly, affluent Hispanic audience, has likely done a lot better in the intervening seven years than many of the other LBOs that were also consummated at the time, frequently at inflated prices.
As with all private equity deals, however, there comes a time to sell and yesterday the Wall Street Journal is reporting that sources have indicated that Saban and his partners have been holding preliminary talks about selling the channel. The Wall Street Journal also indicates the talks may be going nowhere as the owners are asking for a cool US$20 billion for the channel.
In the abstract it is hard to say if that is too high a price as, as for any private company, the company’s current debt load or other financial details are not periodically routinely publicly disclosed, except perhaps to its bond holders.
The levels of fees or other capital withdrawals from Univision by the partners been disclosed either. The WSJ story is also perhaps, therefore, an attempt to influence the atmospherics surrounding any potential negotiation going on, either with a current bidder or with others who may become interested after hearing about it.
Officially Univision spokeswoman has declined to comment, as have other major media companies, though the names of both CBS and Time Warner came up in the WSJ story.
Since 2007 Univision has significantly expanded its operations, adding several new cable channels including its own sports service, new digital properties, HD offerings and its own production studio.
If an outright sale of the company doesn’t work out, the next line down on the list of policy options for providing private equity players with liquidity could be an IPO. Alternatively, as Mexico’s Grupo Televisa already owns a small stake in the company perhaps the FCC could ease its existing rules barring foreign companies from owning more than a 25% stake in American television companies. If they did, and it seems on a case by case basis they can, Grupo Televisa could well find it an attractive proposition.
About Haim Saban
Haim Saban is an American media and entertainment investor, record, film & television producer. With an estimated net worth of $3.4 billion, he is ranked by Forbes as the 144th richest person in America.
Saban was born to a Jewish family in Alexandria, Egypt, in 1944. In 1956, the Saban family immigrated to Israel. He started his career in 1966 as a bass player and manager with the rock band The Lions of Judah (Ha’arayot), and in the early 1970′s moved to France where he worked as a music producer.
Upon his move to the United States, Saban became a television producer, founding Saban Entertainment in 1988. In the 1990s, Saban’s company became best known for the creation and production of the popular Power Rangers franchise.
In 1995 Saban joined Fox Broadcasting to form Fox Family Worldwide, which became one of the world’s leading vertically integrated, global family and children’s entertainment companies that produced, branded, licensed, broadcasted, and distributed live-action and animated family and children’s television programming.
In 2001, Fox Family Worldwide was sold to The Walt Disney Company for US$5.3 billion. In the same year, Saban founded the private investment firm Saban Capital Group, which current private equity investments include Univision and Celestial Tiger Entertainment, which is Malaysia’s largest pay TV platform, set to launch and operate new branded pay television channels across Asia.
In early 2013, Saban Capital purchased a controlling stake in publicly traded Israeli telecom firm Partner Communications. Saban Brands owns and manages the Power Rangers brand and the Paul Frank brand, known for its monkey, Julius. Saban sold Fox Family Channel, a joint venture with News Corp., to Disney in 2001 for $5 billion; Saban’s take was $1.7 billion. Saban and his wife, Cheryl, have donated nearly $47 million to Children’s Hospital Los Angeles, $11 million to the Saban Free Clinic (formerly the Los Angeles Free Clinic) and just over $15 million to the Soroka Medical Center in Israel.